GLOBAL MARKETS-Asia shares sag on caution, dollar consolidates

28 Sep 2015 | Author: | No comments yet »

Asian Stocks Drop on China Concern as Industrial Profits Fall.

BEIJING (AP) — Global stocks were mostly lower Monday following Wall Street’s loss last week as investors looked ahead to Chinese and U.S. economic data.

Asian stocks fell after the biggest drop in China’s industrial profits since at least 2011 underscored the slowdown in the world’s second-largest economy.Emerging-market stocks fell, extending the biggest weekly drop in five weeks, as a slump in Chinese industrial companies’ profits and prospects of higher U.S. interest rates curbed demand for riskier assets.

Toyota Motor Corp. and Sony Corp. were among the largest drags on the regional benchmark equity gauge as more than 1,000 Japanese companies traded without the right to the upcoming dividend. European shares were lower in early trading Monday — Germany’s DAX index was 1% lower, France’s CAC 40 was down 1%, and Britain’s FTSE 100 lost 0.8%. AngloGold Ashanti Ltd. sank 2.7 percent in Johannesburg to lead raw-material producers lower after the Bloomberg Commodity Index halted a two-day gain. Investors concerned that China’s economic downturn might deepen were looking ahead to purchasing managers indexes due Thursday for manufacturing and service industries.

Analysts say they see no signs the U.S. labor market is weakening after the Commerce Department raised its estimate of economic growth in the April-June quarter. Stocks ended last week on a mixed note despite a big early rally Friday, after Federal Reserve Chair Janet Yellen suggested in a speech late Thursday that global economic weakness won’t be significant enough to alter the central bank’s plan to raise its key short-term rate from near zero by December. U.S. data Friday showed the world’s largest economy grew more than previously forecast in the second quarter, a sign that the country may be able to withstand higher borrowing costs. THE QUOTE: “Investor attention will turn to the macro this week,” said Michael McCarthy of CMC Markets in a report. “The big news will flow from China and the USA. On Friday, U.S. non-farm payrolls will speak directly to the potential for an October rate rise.” ASIA’S DAY: Tokyo’s Nikkei 225 index fell 1.3 percent to 17,645.11 and Singapore, Bangkok, Manila and Jakarta also retreated.

The Shanghai Composite gained 0.3 percent, paring its biggest quarterly loss since 2008, as a rally for technology companies overshadowed the industrial profit report. Economist Yating Xu at IHS Global Insight said consumer goods manufacturing is resilient but could suffer if economic growth falls further and drags on domestic consumption. For some traders, the move reduces the likelihood of a government shutdown as soon as October, while raising the specter of a stalemate later in 2015. The ringgit fell for a fifth day,leading losses in Asia, as new allegations against a Malaysian state investment company damped demand for the nation’s assets.

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