US data subdues Asia

GLOBAL MARKETS/ STOCK REPORT

Asian stocks fell, sending a regional benchmark to a two-week low, after the largest decline in US manufacturing in five years and record oil prices heightened concerns the world's biggest economy will enter a recession.

Hon Hai Precision Industry Co, a maker of Apple's iPods, retreated on that speculation demand for the region's electronics will wane. Industrial & Commercial Bank of China led a drop by banks on concerns that weakening US growth will widen credit-market losses.

The manufacturing report "lifts the probability of a global slowdown that will affect everything from European to Asian assets," said Hans Kunnen at Colonial First State Global Asset Management in Sydney. "The outlook is not good."

The MSCI Asia Pacific excluding Japan Index lost 1.3 per cent to 519.32 as of 4:55 pm in Hong Kong, poised for its lowest close since December 21 and its biggest decline since December 17.

The benchmark slid 0.7 per cent yesterday on reports that showed the economies of South Korea and Singapore are slowing.

EUROPE
European stocks fell for a second day, led by retailers, after DSG International forecast that profit will miss analyst estimates.

DSG International, Europe's second-biggest consumer electronics retailer, tumbled 22 per cent. Clothing retailer Next dropped the most in two weeks.

The Dow Jones Stoxx 600 Index lost 0.4 per cent to 359 at 8:43 am in London, extending yesterday's 1.3 per cent decline. The Stoxx 50 sank 0.3 per cent, as did the Euro Stoxx 50, a measure for the euro region.

"The profit warning from DSG International shows that the Christmas season in the UK wasn't nearly as good as any retailer needed it to be," said Espen Furnes, who helps oversee the equivalent of $7.1 billion at Storebrand Asset Management in Oslo. "We're going to see more warnings in the weeks to come."

US
US stock-index futures were little changed as investors awaited reports that may provide clues about employment ahead of the government's monthly figures tomorrow.

Exxon Mobil, the world's biggest oil company, rose in Europe as crude oil traded near a record $100 a barrel. Monsanto gained before the world's biggest maker of seeds releases earnings. Merck & Co and Hewlett Packard declined.

Standard & Poor's 500 Index futures expiring in March added 1.1 points to 1,459.50 as of 9:41 am in London.

Dow Jones Industrial Average futures lost 7 points to 13,129 and Nasdaq 100 Index futures dropped 0.5 points to 2,069.50.

US stocks tumbled yesterday, led by banks and computer companies, after the biggest decline in manufacturing in five years sent the Dow Jones Industrial Average to its worst start since 1983.

"Investors are focussed on the economic data, especially after the ISM miss yesterday," said Jonathan Monk, a US stocks fund manager at Aerion Fund Management in London, which oversees about $23 billion.