Asian markets dropped sharply on weak U.S. data (AP) (16-06-2009)

BANGKOK – Asian stock markets plunged on Tuesday, with Japan and Hong Kong benchmarks down about 3 percent, following weak manufacturing data from the U.S.

Retreating oil prices from eight-month highs dragged commodity stocks lower in Asia while top manufacturers like Japanese automaker Toyota fell on the weak data, and the dollar weakened after Russian President Dmitry Medvedev told a regional summit that the world needs new reserve currencies.

Japan's Nikkei 225 stock average shed 286.79 points, or 2.9 percent, to 9,752.88 even as the central bank said the country's economic conditions "have begun to stop worsening" — an improvement from its previous assessment that the economy had been "deteriorating." The Bank of Japan also left its key lending rate unchanged at 0.1 percent as expected.

Hong Kong's Hang Seng, meanwhile, slid 545.62, or 3 percent, to 17,953.34 and South Korea's Kospi dropped 0.9 percent to 1,399.15. Elsewhere, Australia's index lost 1.7 percent, Singapore retreated 1.9 percent and the Philippine market dived 3.8 percent.

Oil's decline hit commodity stocks with Chinese offshore oil producer CNOOC plunging 5.5 percent in Hong Kong and BHP Billiton, the world's biggest mining company, off 1.5 percent in Sydney trade.

Automakers were hit by the U.S. evidence that manufacturing continues to wilt amid anemic consumer demand. Toyota Motor Corp., the world's biggest automaker, fell 3.4 percent, and Honda Motor Co. retreated 4.1 percent.

In the U.S. on Monday, the Dow Jones industrial average tumbled 187.13, or 2.1 percent, to 8,612.13, returning to a loss for the year. The broader Standard & Poor's 500 index dropped 2.4 percent to 923.72, and the Nasdaq composite index sank 2.3 percent, to 1,816.38.

U.S. stock index futures pointed to modest declines Tuesday on Wall Street. Dow futures were down 13 points, or 0.2 percent, to 8,606, while S&P 500 futures slipped 2.4, or 0.3 percent, at 917.

In currencies, the dollar's recent strength faded, falling to 96.27 yen from 97.63 yen. The euro rose to $1.3835 from 1.3776.

Source: AP