Asian stocks drop despite stronger Japan, US data
HONG KONG (AP) — Asian stocks were lower Monday as investors looked past an upbeat report on Japanese growth to signs that the world’s third-biggest economy would slow in the second quarter.
KEEPING SCORE: Japan’s Nikkei 225 fell 0.4 percent to 20,388.75 and South Korea’s Kospi slipped 0.2 percent to 2,065.02. Hong Kong’s Hang Seng lost 0.2 percent to 27,212.60 while the Shanghai Composite Index edged up 0.1 percent to 5,028.31. Southeast Asian benchmarks were also lower. Australia’s stock market was closed for a holiday.
JAPAN ECONOMY: The Cabinet Office said the economy grew 3.9 percent in the January-March quarter, faster than the 2.4 percent initially estimated. However, the picture may not be as rosy as the headline number suggests, as analysts expect growth in the second quarter to slow sharply as consumer spending slows and industrial output wanes.
ANALYST VIEW: Rising inventories contributed to the Japan data’s upward revision the first quarter and “this implies that the underlying pace of demand was not nearly as strong as the headline suggests,” said Marcel Thieliant of Capital Economics. Core consumer spending fell in April to the lowest level since last summer and industrial output may well contract this quarter, and “we therefore expect a sharp slowdown in GDP growth in the second quarter.”
WALL STREET: Major U.S. benchmarks drifted to a loss on Friday despite a report that showed a burst of hiring in the U.S. job market in May. The Dow Jones industrial average fell 0.3 percent to 17,849.46 while the Standard & Poor’s 500 lost 0.1 percent to 2,092.83. The Nasdaq edged up 0.2 percent, to 5,068.46.
ENERGY: Benchmark U.S. crude oil dropped 47 cents to $58.66 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose $1.13 to close at $59.13 a barrel on Friday. Brent crude, a benchmark for international oil used by many U.S. refineries, fell 48 cents to $62.83 in London.
CURRENCIES: The dollar slipped to 125.36 yen from 125.61 yen on Friday. The euro weakened to $1.1098 from $1.1113.