Asia markets hit as growth fears return

Asian markets mostly fell yesterday after worse-than-expected economic data from China and Europe stoked fresh concerns over global growth, bringing an end to a recent spell of optimism. Tokyo fell 1.14%, or 115.61 points, to 10,011.47 and Sydney finished flat, nudging 3.3 points lower to 4,270.4, while Hong Kong slipped 1.11%, or 232.76 points, to 20,668.80 and Shanghai lost 1.10%, or 26.23 points, to 2,349.54. But Mumbai bucked the gloomy trend, while Seoul eked out a small gain, adding 0.71 points to 2,026.83. Global markets have staged an impressive rally since the turn of the year thanks to consistently upbeat US jobs data as well as European leaders’ success in helping Greece avoid a messy default. But news on Thursday that manufacturing activity in China, the world’s number two economy, had hit a four-month low was compounded later in the day by figures indicating the eurozone was in recession. Banking giant HSBC said its Purchasing Managers’ Index (PMI) for China had fallen to 48.1 in March, compared with a final reading of 49.6 in February. A reading above 50 indicates the sector is expanding while a reading below 50 suggests a contraction. The figures—which come after Beijing reported a huge February trade deficit and leaders lowered their growth target for the year—added fuel to fears that China’s economy is losing its strength. Later in the day a composite PMI of manufacturing and services for the 17-nation eurozone by the Markit research firm fell more sharply than expected in March, pointing to a recession. The survey of 4,500 manufacturing and services firms slowed to 48.7 in March after reaching 49.3 in February. “It’s not really a surprise to anyone that factory activity is contracting in the eurozone,” said Chris Hunter at Western Union Business Solutions in New Zealand, according to Dow Jones Newswires. But it was “worrying that the two biggest economies—Germany and France—are starting to fall back,” he said. Adding to the downbeat numbers was news that Ireland’s economy shrank 0.2% in the fourth quarter, following a 1.1% contraction in the previous three months, placing it back into a technical recession. Elsewhere in Asia; Singapore closed 0.36%, or 10.83 points, higher at 2,990.08; Taipei rose 0.21%, or 16.67 points, to 8,076.61; Manila was virtually unchanged, dipping 1.08 points to 5,042.44; Wellington closed 0.73%, or 25.35 points, lower at 3,449.31; Kuala Lumpur added 0.16%, or 2.59 points, to 1,585.83; Bangkok rose 0.29%, or 3.44 points, to 1,194.44 and Jakarta was closed for a public holiday.