Asian shares lower amid China manufacturing slowdown, Europe debt jitters

more images

more images

Asian markets fall amid China, Europe jitters

BANGKOK — Asian stocks fell Tuesday amid news China’s manufacturing slowed in May and as investors fretted Europe’s shaky government finances could undermine the global economic recovery.

With no fresh cues from Wall Street, which was closed for a holiday Monday, investors in the region returned to a theme that has troubled markets for weeks: whether austerity measures to address Europe’s debt mountain will send the region back into recession, hurting export-reliant Asia.

Surveys showing that growth in China’s manufacturing had slowed recently underlined that Asian manufacturers and exporters remain vulnerable to any waning of demand from Europe and elsewhere.

Oil prices, meanwhile, hovered below $74 a barrel. The dollar was little changed against the yen but strengthened against the euro.

Japan’s Nikkei 225 stock average fell 65.96 points, or 0.7 percent, to 9,701.65 and Australia’s S&P/ASX 200 dropped 0.5 percent to 4,405.7.

In Seoul, the Kospi lost 0.9 percent to 1,626.81, Taiwan’s benchmark shed 1.1 percent to 7,291.15 and Hong Kong’s Hang Seng was off 0.7 percent to 19,634.39.

Masatoshi Sato, market analyst at Mizuho Investors Securities Co. Ltd. in Tokyo, said investors remained worried about the impact of Europe’s debt crisis on the global economy.

“Investors are not convinced that the crisis will end soon. With growing uncertainty over the euro zone’s crisis, investors are bracing for a further slump in the euro against the dollar,” Sato said.

Political uncertainty was also a negative in Tokyo, where Prime Minister Yukio Hatoyama faced mounting calls for his resignation after a small party left his coalition government in protest at the reversal of a campaign promise to move a U.S. military base off the southern island of Okinawa.

Linus Yip, a strategist at First Shanghai Securities in Hong Kong, said that manufacturing news out of China on Tuesday may have dampened sentiment. Surveys showed that the recovery in China’s manufacturing slowed in May due to lackluster demand both at home and abroad.

“It was not too good because it fell below market expectations,” Yip said.

But he said the downdraft in markets on Tuesday may just be a temporary dip with investors pausing for breath after several days of gains. “I think it may be a pullback,” Yip said. “Hong Kong had a good rebound for three straight days.”

In currencies, the dollar remained little changed against the yen, which stood at 91.23 midday Tuesday. The euro slipped to $1.2274 from $1.2304.

Benchmark crude for July delivery was down 6 cents at $73.90 a barrel at in electronic trading on the New York Mercantile Exchange.

Associated Press writer Shino Yuasa contributed to this report from Tokyo.