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Asian Shares Mostly Lower After Plunge In US GDP

stockmarkets dec27 31jul20 lt

Asian stocks ended mostly lower on Friday after data showed a record contraction in U.S. economic activity in the second quarter.

Coronavirus fears and the possibility of a delayed November election in the U.S. also weighed on the markets, while better than expected quarterly earnings results from tech giants such as Apple, Amazon, Alphabet and Facebook as well as upbeat data from China and Japan helped ease worries about a global economic recovery.

Chinese shares advanced amid signs the economy continues its steady recovery from the coronavirus slump. The benchmark Shanghai Composite Index gained 23.18 points, or 0.7 percent, to finish at 3,310.01, while Hong Kong's Hang Seng Index ended down 0.5 percent at 24,595.35.

The manufacturing sector in China continued to expand in July, the National Bureau of Statistics said, with a manufacturing PMI score of 51.1, up from 50.9 and beating expectations for a score of 50.7.

The non-manufacturing PMI came in with a score of 54.2 - matching forecasts and down from 54.4 in the previous month.

Japanese shares lost ground as the yen strengthened and Tokyo counted a record one-day high of 463 coronavirus cases. The Nikkei 225 Index plummeted 629.23 points, or 2.8 percent, to 21,710, while the broader Topix closed 2.8 percent lower at 1,496.06. Rubber product, marine transportation and mining companies paced the decliners.

Market heavyweight SoftBank Group plunged 4.4 percent and Fast Retailing tumbled 3.2 percent. Leading semiconductor test equipment supplier Advantest gave up almost 15 percent after reporting weak quarterly results. Panasonic shed 13.3 percent after recording its first quarterly loss in nine years.

In economic news, industrial output in Japan was up a seasonally adjusted 2.7 percent sequentially in June, official data showed. That beat forecasts for a gain of 1.2 percent following the 8.9 percent decline in May.

Japan's unemployment rate came in at a seasonally adjusted 2.8 percent in June. That beat forecasts for 3.1 percent and was down from 2.9 percent in May.

Australian markets tumbled as a surge of Covid-19 cases in Victoria showed few signs of abating and tighter restrictions loomed. The S&P/ASX 200 Index slumped 123.30 points, or 2 percent, to 5,927.80, while the broader All Ordinaries Index ended down 119.20 points, or 1.9 percent, at 6,058.30.

Energy stocks were among the hardest hit after oil prices touched three-week lows in the previous session. Woodside Petroleum, Santos and Oil Search lost 2-3 percent.

Electricity and gas retailer Origin Energy plunged 4.6 percent after its fourth quarter revenue from its share in the Australia Pacific LNG project fell 5.2 percent.

The big four banks gave up 2-3 percent. AMP shares nosedived 12.8 percent. The wealth manager said it expects its underlying profit to more than halve in the first-half.

Mining heavyweights BHP and Rio Tinto declined 2.9 percent and 2.4 percent, respectively. Gold miners extended losses for a fourth consecutive session, with Newcrest Mining and Northern Star Resources falling over 1 percent.

Seoul stocks ended lower to snap a four-day winning streak amid selling by foreign investors due to uncertainty about when the coronavirus pandemic will peak. The benchmark Kospi dropped 17.64 points, or 0.8 percent, to 2,249.37. Market bellwether Samsung Electronics shed 1.9 percent and No. 2 chipmaker SK Hynix declined 2.9 percent.

Investors ignored positive industrial output, retail sales and facility investment data showing sequential growth in June.

Industrial production rose a seasonally adjusted 7.2 percent in June, Statistics Korea said - beating forecasts for an increase of 2.1 percent following the 6.7 percent decline in May.

Retail sales were up a seasonally adjusted 3.4 percent in the month- roughly in line with expectations and down from the 4.6 percent growth in May. Facility investment increased 5.4 percent from a month ago.

New Zealand shares fluctuated before ending modestly higher for the day. The benchmark NZX-50 Index rose 0.3 percent to 11,727.63. Tourism Holdings shares jumped 9.9 percent after the campervan rental company provided a robust outlook for 2021.
Markets in Singapore, Indonesia and Malaysia were closed in observance of Eid al-Adha.

U.S. stocks ended mixed overnight as investors reacted to worrying GDP and unemployment claims figures, a delay in a stimulus bill and a continued surge in coronavirus cases across the world. President Donald Trump exacerbated investor nervousness by floating the possibility of delaying the U.S. presidential election.

The Dow Jones Industrial Average gave up 0.9 percent and the S&P 500 shed 0.4 percent while the tech-heavy Nasdaq Composite rose 0.4 percent ahead of key earnings for the tech sector.

Data showed the U.S. economy suffered its worst period ever in the second quarter, with GDP falling a historic 32.9 percent, while initial jobless claims increased for the second straight week.

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