Asian stocks fall further on US growth data

Asian stocks extended their slump Monday as last year’s rally showed more signs of petering out.

Most markets pulled back as investors sold down a broad range of sectors, adding to sharp losses over the last couple weeks. The euro recovered modestly after tumbling to its lowest point against the dollar in nearly seven months.

Investors took little comfort in U.S. figures released Friday that showed the world’s largest economy grew at an annualized rate of 5.7 percent last quarter.

While beating forecasts, the strong growth was spurred by the relatively short-term demand created by companies restocking their inventories and raised doubts about the sustainability of America’s turnaround once government stimulus measures begin to wane.

“There’s no doubt that kind of growth will not last,” said Jan Friederich, a senior economist for the Economist Intelligence Unit in Hong Kong.

“Markets are factoring in a relatively robust and sustained recovery and any signs that may be overly optimistic will have huge implications,” he said. “It’s very likely there will be a lot of disappointment later this year.”

Japanese markets fluctuated, with the Nikkei 225 stock average up 18.19 points, or 0.2 percent, at 10,216.23.

In China, news that manufacturing activity was still strong in January, albeit down slightly, was taken as more evidence government will maintain its efforts to keep a lid on growth and inflation.

Shanghai led Asia’s slide, falling 57.06, or 1.9 percent, to 2,932.23, and Hong Kong’s Hang Seng index shed 109.89 points, or 0.6 percent, to 20,012.10.

Elsewhere, South Korea’s Kospi rose 4.46, or 0.3 percent, to 1,606.89. The country’s car companies bucked the region’s broader selling as rival Japanese automakers Toyota and Honda struggled with recalls. Hyundai Motor climbed 1.8 percent and Kia Motors was up 3.3 percent.

Wall Street futures suggested U.S. markets would open higher on Monday. S&P futures were up 1.3, or 0.1 percent, at 1,071.70.

In the U.S. Friday, Wall Street was unable to hold onto its gains as worries about future economic growth and company profits weighed on investors.

The Dow fell 53.13, or 0.5 percent, to 10,067.33. The Dow is now down 658.10, or 6.1 percent, since reaching its 15-month high of 10,725.43 on Jan. 19.

The S&P 500 index fell 10.66, or 1 percent, to 1,073.87, while the Nasdaq composite index fell 31.65, or 1.5 percent, to 2,147.35, lagging the other measures after Microsoft Corp.’s results disappointment investors.

Oil prices were down in Asia, with benchmark crude for March delivery falling 24 cents to $72.65.

The dollar gained to 90.20 yen from 89.79 yen. The euro traded higher at $1.3880 from $1.3861.

Source: AP