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Asia stocks sharply lower on U.S. concerns; Nikkei drops 2.1%

Published 08/03/2011, 02:53 AM
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Investing.com – Asian stock markets suffered heavy losses on Wednesday, as mounting concerns that the U.S. economic recovery was faltering prompted investors to shun riskier assets. 

During late Asian trade, Hong Kong's Hang Seng Index tumbled 2.2%, Australia’s ASX/200 Index plunged 2.3%, while Japan’s Nikkei 225 Index sank 2.1%.   

Data on Tuesday showed that U.S. personal income rose by 0.1% in June, the smallest gain since last November, while personal spending unexpectedly dropped 0.2%, the first decline in nearly two years, adding to concerns over the U.S. economic recovery.

Shares in Japanese exporters with high exposure to the U.S. came under pressure, amid a downbeat outlook for export earnings.

Consumer electronics giant Sony saw shares drop 2.5%, plasma television maker Panasonic lost 2.85%, while automakers Honda and Nissan saw shares retreat 3.2% and 2.8% respectively. 

In Hong Kong, shares in oil producers led losses after crude oil prices fell to a five-week low on the New York Mercantile Exchange, dampening earnings prospects for energy explorers.

Oil and gas giant PetroChina saw shares slide 2.4%, China’s largest offshore oil producer CNOOC saw shares fall 2.5%, while shares in Sinopec dropped 1.9%.

Exporters were also down heavily, with Li & Fung, the world’s biggest supplier of toys to major U.S. retailers, tumbling 5.1%, while shares in Esprit Holdings, the Hong Kong-based retailer that counts Europe as its largest market fell 4.3%.

Elsewhere, Australia’s ASX/200 Index fell to an 11-month low, dragged down by retailers after official data showed that retail sales unexpectedly fell in June.

Shares in department store chain David Jones slumped 1.5%, while Harvey Norman Holdings, the country’s biggest electronics retailer, dropped 2.3%.

The outlook for European stock markets, meanwhile, was mixed. The EURO STOXX 50 futures pointed to a loss of 0.25%, France’s CAC 40 futures shed 0.3%, the FTSE 100 futures rose 0.15%, while Germany's DAX futures edged 0.1% higher.

Later in the day, payroll processing firm ADP was publish a report on U.S. non-farm payrolls, while the U.S. Institute of Supply Management was to publish data on service sector growth.

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