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Asia stocks fall on dismal US hiring report

business Updated: Jun 04, 2012 13:20 IST

AP
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Asian stock markets took a beating Monday as another setback for the US economic recovery sent investors fleeing.

Weak US hiring in May pushed Wall Street indexes to their biggest declines of the year on Friday. The Dow Jones industrial average fell 275 points, its biggest one-day decline since November.

The dismal report came on the heels of other data that showed weak economic conditions in Europe and Asia. Unemployment in the 17 countries that use the euro currency stayed at a record-high 11 percent in April.

There were signs that growth in China, which helped sustain the global economy through the 2008-2009 recession, is slowing significantly. China's manufacturing weakened in May, according to surveys released Friday.

Japan's Nikkei 224 index dropped 1.9 percent to 8,277.56 and Hong Kong's Hang Seng tumbled 2.4% to 18,119.01.

South Korea's Kospi shed 2.9% to 1,781.99. Key indexes in mainland China and Singapore fell, while benchmarks in Taiwan and Indonesia were down more than 3%.

"US jobs numbers were not the only weak reading as manufacturing output data in China and the US were also lower, and euro area unemployment reached a record level," Stan Shamu of IG Markets in Melbourne, said in an email.

"There aren't many positives for risk assets at the moment," he said.

American employers added just 69,000 jobs in May, the fewest in a year, and the unemployment rate increased to 8.2% from 8.1%. Economists had forecast a gain of 158,000 jobs.

The report, considered the most important economic indicator each month, also said that hiring in March and April was considerably weaker than originally thought.

But the bleak outlook was balanced by what some analysts said was a sell-off that could result in good bargains for oversold stocks.

"I think it's good in terms of trading, because when there is some panic selling, then the selling pressure will be released and the short-term bottom will be there, suggesting a technical rebound," said Linus Yip, strategist at First Shanghai Securities in Hong Kong.

Falling prices for industrial metals like copper and aluminum, which are widely used in construction and manufacturing, hurt mining and resource shares. Anglo-Australian mining giant Rio Tinto Ltd. fell 4.2%. Hong Kong-listed Jiangxi Copper Co. lost 3.4%. Energy Resources of Australia plummeted 8.8%.

Heavy industrial shares also faltered. Japan's Nishimatsu Construction Co. plunged 8.3% and Australia's BlueScope Steel Ltd. sank 7.8%.