Shares slumped in Asia on Friday, tracking an overnight decline on Wall Street, while upbeat Chinese manufacturing data failed to lift benchmarks in Hong Kong and Shanghai.
Japan’s Nikkei 225 index dropped 1.2 percent to 19,973.32 and the Hang Seng in Hong Kong fell 0.8 percent to 25,748.88. South Korea’s Kospi lost 0.3 percent to 2,388.66. The Shanghai Composite index lost 0.1 percent to 3,183.81 and Australia’s S&P ASX 200 lost 1.5 percent to 5,732.00. Shares in Southeast Asia were mostly lower.
Despite an encouraging report by the Commerce Department, which said U.S. gross domestic product (GDP), the broadest measure of economic health, increased at an annual rate of 1.4 percent in the first quarter, investors unloaded technology stocks as investors bet central bankers may be ready to lift rates.
Many traders shifted from growth sectors, like technology, into value stocks, such as banks. Standard & Poor’s 500 index fell 0.9 percent to 2,419.70. The Dow Jones industrial average slid 0.8 percent to 21,287.03 and the Nasdaq composite lost 1.4 percent to 6,144.35.
A survey showed China’s manufacturing activity accelerated in June, helped by stronger foreign demand for Chinese goods. The monthly purchasing managers’ index issued by the Chinese statistics bureau and an industry group on Friday rose to 51.7 from May’s 51.2 on a 100-point scale on which numbers above 50 show activity expanding. The Federation of Logistics & Purchasing said it was the 11th straight month of improvement.
“Looking ahead, however, we suspect that the current resilience of growth will prove temporary. With tight monetary conditions weighing on credit growth, it will be difficult to avoid a renewed slowdown in growth later this year,” Julian Evans-Pritchard of Capital Economics said in a commentary.
Benchmark U.S. crude rose 23 cents to $45.16 a barrel in electronic trading on the New York Mercantile Exchange. It gained 19 cents to settle at $44.93 a barrel on Thursday. Brent, the international standard, gained 28 cents to $47.91.
The dollar fell to 111.95 yen from 112.18 yen late Thursday. The euro slipped to $1.1430 from $1.1440. The British pound rose to $1.3007 from $1.2999. European currency markets have been volatile in recent days after leading central bankers appeared to hint at a turn in monetary policy soon.