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Asian stocks sink over global economy fears

8:12 PM, Jan 26, 2014   |    comments
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HONG KONG (AP) - Asian stock markets tumbled Monday as investors factored in the possibility of slowing growth in China and a further reduction in U.S. central bank stimulus.

The global sell-off that is roiling world markets was triggered by preliminary results Thursday of a survey showing that China's manufacturing would contract in January.

Investors are also awaiting a two-day meeting by the U.S. Federal Reserve starting Tuesday, where officials are widely expected to reduce their monthly bond buying by another $10 billion to $65 billion. Turmoil in individual emerging markets such as Argentina, where the peso dropped 16 percent over two days last week, is also spooking investors.

Japan's Nikkei 225 sank 2.6 percent to 14,993.89 as investors sought out havens such as the Japanese yen, causing it to rise against the dollar which is negative for export stocks.

Hong Kong's Hang Seng lost 2.3 percent to 21,937.46 and Seoul's Kospi dropped 1.7 percent to 1,907.90.

In mainland China, the Shanghai Composite Index dropped 1.1 percent to 2,031.24. Benchmarks in Taiwan, Singapore and New Zealand also slipped.

In the U.S. on Friday, the Dow finished down 2 percent at 15,879 and the Standard & Poor's 500 fell 2.1 percent to 1,790. The Nasdaq composite fell 2.2 percent to 4,128.

In currencies, the dollar slipped to 102.36 Japanese yen from 102.38 late Friday. The euro strengthened to $1.3688 from $1.3676.

In energy markets, benchmark crude for March delivery rose 20 cents in electronic trading on the New York Mercantile Exchange. The contract fell 68 cents to close at $96.64 on Friday.

(Copyright 2014 by The Associated Press. All Rights Reserved.)

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