Bleak U.S. Jobs Report Sends Asian Markets Lower

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asian marketsAsian markets closed lower Friday. In Japan the Nikkei 225 Index slumped 2% to 9,179 and in China the Shanghai Composite Index fell 1.7% to 2,642. Hong Kong's Hang Seng Index inched down 0.4% to end the day at 20,982.

Thursday's bleak announcement that U.S. jobless claims spiked by 12,000 to 500,000 last week sent shivers through markets. Many analysts expected the number of jobless claims to fall, and the sudden increase does not bode well. It could indicate that U.S. companies actually increased layoffs in the past few months. More unemployed workers mean fewer people are out shopping for Asian-made goods, including flat screen televisions, cameras and cars.

Sharp tumbled 2.7% in Tokyo after the electronics company announced it will slash production of LCDs for up to two months, reports Reuters. This includes large panels the company manufactures for television makers like Sony. U.S. stores are contending with overstocks of TVs as shoppers steer clear of larger purchases. Sony sank 2.5%, Mitsubishi Electric plummeted 5.4% and Pioneer dived 3.2%.

Among camera makers, Konica Minolta slumped 3.6%, Olympus tumbled 3.4% and Canon fell 2.2%. Fujifilm, which also makes medical equipment, dropped 1.8%.

Japanese car makers suffered today with Nissan plunging 2.4%, Toyota sliding 1.8% and Honda retreating 1.6%. Mazda, which just announced a new recall, slipped 1.5% and Isuzu was down 0.4%. According to the Financial Times, new car sales in the U.S. rose in July, hitting their highest level this year. But gloomy economic forecasts could certainly put a damper on upcoming sales.

In Hong Kong, property developers were among the worst performers. Investors are keeping a close eye on Beijing's policies designed to rein in property speculators, and so far, it doesn't look like it will be loosening up any time soon. Today China Resource Land nosedived 2.7%, China Overseas plunged 1.5%, Cheung Kong was down 1.3% and Sun Hung Kai lost 1.1%. Wharf Holdings, with its portfolio of brightly lit shoppers paradises, which are open late into the night, including the Times Square shopping center and the Harbor City mall in Kowloon, declined 1% today. The company originally owned docks in Hong Kong Harbor, and still runs the Star Ferry, which transports passengers from Hong Kong Island to Kowloon for HK$2 (25 cents).

Some stocks rose in Hong Kong, including oil explorer Cnooc, which surged 2% on increased first-half profits. ZTE, a maker of mobile communications systems and equipment rallied 5.3% and China Mobile advanced 1.3%. But Foxconn, a maker of mobile phones and computer equipment for the likes of Apple, Dell and HP, slid 0.8% on fears that a weaker U.S. economy would have a dire effect on sales.

In China, banks and real estate stocks dragged the index lower as local papers warned that inflation may be on its way. Poly Real Estate fell 2.9%, Gemdale slumped 1.8% and China Vanke dropped 1%. Shanghai Pudong Development Bank declined 1.8% and China Merchants Bank receded 0.7%.

Chinese raw materials producers also closed lower as a slowing U.S. economy would threaten demand for Chinese exports. Jiangxi Copper tumbled 4.3%, Zijin Mining skidded 3.3% and Baoshan Iron & Steel declined 2.7%. But so far, the slowdown has spurred Americans to favor cheaper Chinese-made goods over more expensive U.S.-made products, which should hearten Asian manufacturers.
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