Asian Stocks Follow Wall Street Lower

(RTTNews) - Asian stocks fell sharply on Friday as investors continued to take profits despite some encouraging data out of Europe and the United States. Activity in the Chinese service sector slowed in December, official data showed, spoiling investor mood. The yen inched higher in a short-covering rally and gold continued to trade higher in Asian deals, adding to Thursday's rally, as investors shunned investment in equities amid concerns about valuations.

The Bank of Japan will maintain its quantitative and qualitative monetary easing until the 2 percent inflation target is attained, Governor Haruhiko Kuroda said during an interview. "The limit of two years is our initial intent and expectation," he added. The Japanese market remained closed for a public holiday.

China's Shanghai Composite index fell 1.2 percent to 2,083 after another government survey suggested China's economic recovery may be losing momentum. Hong Kong's Hang Seng index tumbled 2.2 percent to 22,817, a two-week low.

An index measuring non-manufacturing business activity in China posted a seasonally adjusted score of 54.6 in December, down sharply from 56.0 in November, the latest survey from the China Federation of Logistics and Purchasing revealed. The headline figure for services business activity declined to 52.5 from 54.1 in the previous month, while the new orders index remained unchanged at 51.0.

Earlier this week, two measures of factory output indicated that overall expansion in China's vast manufacturing sector was moderating.

Australian shares fell modestly in thin trading following the release of disappointing Chinese non-manufacturing data. The benchmark S&P/ASX 200 slipped 0.3 percent to 5,350 after hitting a six-week high on Thursday. Banks fell across the board, with ANZ and Westpac edging down marginally, while Commonwealth dropped 0.3 percent and NAB shed 0.4 percent. Big miners BHP Billiton and Rio Tinto fell 1.1 percent and half a percent respectively. Fortescue Metals Group dropped 1.9 percent as it resumed surface mining operations following a fatality at its Christmas Creek mine.

Seoul shares extended declines for a second consecutive session amid concerns about volatility in the Korean won in recent days. The benchmark Kospi average dropped 1.1 percent to 1,946, a four-month low. The country's currency authorities are closely watching the exchange rate movements and would take measures if needed to reduce any extreme volatility, Finance Minister Hyun Oh-seok reportedly said. Samsung Electronics lost a percent, extending Thursday's losses, in response to broker downgrades amid concerns about slowing growth at its mobile business.

Gold miner Newcrest gained 2.6 percent and Kingsgate Consolidated shares soared 6.3 percent. Energy stocks closed mostly lower after U.S. crude futures tumbled on Thursday on expectations of a rise in Libyan oil production. Woodside Petroleum fell 1.1 percent, Santos declined 0.8 percent and Oil Search lost a percent. Forge Group slumped 6.6 percent after the company said investment giant BlackRock has emerged as a new substantial shareholder in the mining services company.

New Zealand shares rose notably in light trading as trading resumed following a two-day holiday. The benchmark NZX-50 index rose 0.7 percent to finish at 4,769, with 24 of its components advancing. Gold miner OceanaGold soared 11 percent after gold prices shot up on Thursday on signs of increased physical demand in Asia.

Among other prominent gainers, Fonterra Shareholders' Fund Units, Telecom, Auckland International Airport and Diligent Board Members Services climbed 2-6 percent. Retailers ended mostly lower, with Kathmandu Holdings pacing the declines.

Elsewhere, India's Sensex was down 0.4 percent and the Taiwan Weighted average shed 0.8 percent, while the key benchmark indexes in Indonesia, Malaysia and Singapore were down more than a percent each.

U.S. stocks kicked off the New Year in the red on Thursday, as traders cashed in on the recent strength in the markets. On the economic front, weekly jobless claims fell for a second straight week and construction spending rose in line with economist estimates in November, while there was a slight slowdown in the pace of manufacturing sector growth in December after six straight monthly gains, separate reports showed. The Dow and the tech-heavy Nasdaq fell about 0.8 percent each, while the S&P 500 dropped 0.9 percent.