Thursday, July 12, 2012

Asian stocks fall amid China's slowing economy

(AP) ? Asian stock markets fell Thursday amid speculation that China, the region's economic engine, may announce gross domestic product slowed in the second quarter.

Japan's Nikkei 225 index was down 1.4 percent to 8,725.25 while Hong Kong's Hang Seng plunged 2 percent at 19,040.54.

South Korea's Kospi slipped 1.2 percent to 1,803.88. Australia's S&P/ASX 200 dropped 0.7 percent to 4,067.10 and China's Shanghai Composite slid 0.1 percent to 2,172.92.

Europe's debt crisis and signs of weak growth in the United States are undermining demand for Chinese exports and have investors concerned that a slowdown in the world's second-largest economy could be worsening.

China is scheduled to announce GDP results for the April to June period on Friday, and growth likely slowed to 7.9 percent, the worst reading in the aftermath of the 2008 global financial crisis, Singapore's DBS Bank said. China's economy grew 8.1 percent in the first quarter.

"Growth momentum in China has been clearly decelerating in the second quarter," DBS said in a report. "Lingering woes in Europe and downward revisions in U.S. growth projections of late point to more challenges ahead for exports."

Equity markets in Asia also fell because the U.S. central bank gave no indication it plans to soon implement another round of Treasury bond purchases known as quantitative easing. The Federal Reserve released the minutes from its last meeting Wednesday, and investors were looking for signs that the Fed will take action to boost flagging economic growth.

Traders will be closely watching for any changes to Japan's monetary policy after its central bank ends a two-day meeting on Thursday. Bank of America Merrill Lynch said it expects the Bank of Japan to leave its benchmark lending rates unchanged as it waits for the Fed to decide about more quantitative easing.

On Wednesday, the Dow Jones industrial average closed down 0.4 percent at 12,604.53. The Standard & Poor's 500 was steady at 1,341.45. The Nasdaq composite was down 0.5 percent at 2,887.98.

Benchmark oil for August delivery was down 36 cents at $85.45 a barrel in electronic trading on the New York Mercantile Exchange. Crude rose $1.90 to settle at $85.81 on Wednesday in New York.

In currencies, the euro rose to $1.2239 from $1.2228 late Wednesday in New York. The dollar dropped to 79.52 yen from 79.67 yen.

Associated Press

Source: http://hosted2.ap.org/APDEFAULT/f70471f764144b2fab526d39972d37b3/Article_2012-07-12-World%20Markets/id-44b4eabc7b1d4f5092ce22050f18c870

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