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Asian stocks fall as Chinese service sector slows down

Published 01/03/2014, 12:37 AM
Updated 01/03/2014, 12:38 AM
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Investing.com – Asian shares fell on Friday on the news of a slowing Chinese service sector and off a negative lead from the U.S. with Japan markets shut for the New Year holiday.

Data from the China’s official nonmanufacturing Purchasing Managers’ Index showed that the activity in the Chinese retail, real estate and construction sector slowed in December. Released on Friday, the statement gave a reading of 54.6 for December in comparison to 56 in November.

The fall was also due to the shifting of funds from Shanghai Stock Exchange to the Shenzhen Stock Exchange awaiting new listings there, which is expected to boost the Shenzhen's ChiNext index.

In the morning the Shanghai Composite index fell 1.36% and the neighboring Hang Seng index fell 2.03%

Earlier on Thursday, U.S. stocks fell and for the first time since 2008 they opened a year in negative territory, on news Apple was downgraded as well as on sentiments that a rally fueled by hopes for a more robust 2014 sent prices to levels ripe for profit taking.

At the close of U.S. trading, the Dow Jones Industrial Average fell 0.82%, the S&P 500 index fell 0.89%, while the Nasdaq Composite index fell 0.80%.

Wells Fargo downgraded tech icon Apple to "Market Perform" from "Outperform" in a move that hit technology stocks hard on Thursday and sent broader indices falling.

Investors also sold for profits on the view that stocks were due for a breather after weeks of gains fueled by sentiments for a more robust 2014.

Investors largely shrugged off solid U.S. economic indicators.

The U.S. Department of Labor reported earlier that the number of individuals filing for initial jobless benefits in the week ending Dec. 28 declined by 2,000 to a seasonally adjusted 339,000.

Analysts had expected U.S. jobless claims to fall by 7,000 to 334,000 last week from the previous week’s revised total of 341,000, though the figure did fall and received praise from analysts.

Elsewhere, the Institute for Supply Management reported that its purchasing managers' index dipped to 57.0 last month from 57.3 in November, in line with expectations.

Leading Dow Jones Industrial Average performers included Wal-Mart Stores, up 0.29%, Boeing, up 0.13%, and Walt Disney, which was down 0.15%.

The Dow Jones Industrial Average's worst performers included DuPont, down 1.95%, General Electric, down 1.91%, and Cisco, down 1.89%.

European indices, meanwhile, finished lower. After the close of European trade, the EURO STOXX 50 fell 1.46%, France's CAC 40 fell 1.60%, while Germany's DAX 30 fell 1.59%. Meanwhile, in the U.K. the FTSE 100 finished down 0.46%.

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