Most Asian stocks fall as slump in factory output fuels concern over recovery in the US

Most Asian stocks down amid US recovery worries

TOKYO — Most Asian stock markets fell Friday as a drop in American factory output and weak U.S. regional manufacturing activities fueled concern over the strength of a recovery in the world’s biggest economy.

Japan’s benchmark Nikkei 225 stock index lost 224.88 points, or 2.3 percent, to 9,460.65, extending losses from the morning session.

“Sentiment turned downbeat as the latest U.S. indicators underlined an economic recovery is slowing,” said Masatoshi Sato, market analyst at Mizuho Investors Securities Co. Ltd.

The U.S. government said Thursday its factory output dropped 0.4 percent in June, the most in a year, because of a slump in production of automobiles, home-building materials and processed food.

The disappointing output figure, marking the first decline in four months, sent U.S. stocks falling overnight as the Dow Jones industrial average lost 7.41 points, or 0.07 percent, to 10,359.31 on Thursday.

Apart from falling factory output, two U.S. regional manufacturing indexes sank in July, raising concern the U.S. economic recovery may be stalling.

The Nikkei stock was also hit by heavy selling due to a strong yen, which hurts Japanese exporters as it cuts their overseas profits.

Among top Japanese exporters, Sony Corp. dropped 4.9 percent to 2,405 yen. Toyota Motor Corp. lost 1.4 percent to 3,130 yen, while Honda Motor Co. fell 1.1 percent to 2.652 yen.

Investors were also reluctant to chase gains ahead of a long weekend in Japan. The country’s financial markets will be closed Monday because of a public holiday.

South Korea’s Kospi shed 0.5 percent to 1,742.22, and Australia’s S&P/ASX 200 was down 0.4 percent at 4,440.60.

Elsewhere, Hong Kong’s Hang Seng index declined 0.08 percent to 20,239.29 and the Shanghai Composite Index lost 1.2 percent to 2.395.31. But shares in Singapore and Taiwan climbed marginally.

In currencies, the dollar declined to 87.03 yen in Tokyo from 87.42 yen in New York late Thursday. The euro slipped to $1.2920 from $1.2928.

Benchmark crude for August delivery was down 3 cents to $76.59 a barrel at midday Singapore time in electronic trading on the New York Mercantile Exchange. The contract lost 42 cents to settle at $76.62 on Thursday.