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Asian shares extend losses, China data disappoints

Asian markets sank further in holiday-thinned trade on Monday, following another global sell-off caused by anxieties over emerging markets and further disappointing manufacturing data out of China.

HONG KONG: Asian markets sank further in holiday-thinned trade on Monday, following another global sell-off caused by anxieties over emerging markets and further disappointing manufacturing data out of China.

The euro edged up against the yen after falling in New York in response to weak eurozone inflation figures that added to fears of deflation in the currency bloc.

Tokyo fell 1.98 per cent, or 295.40 points, to 14,619.13 and Seoul slipped 1.09 per cent, or 21.19 points, to 1,919.96 while Sydney closed flat, edging down 2.1 points to 5,187.9.

However, Bangkok was up 1.45 per cent, or 18.53 points, to 1,292.81, despite chaotic weekend elections that saw thousands of polling stations closed by opposition protesters following weeks of anti-government demonstrations.

In other markets, Manila closed 0.43 per cent lower, giving up 25.89 points to 6,015.30, Singapore eased 1.20 per cent, or 36.27 points, to 2,990.95, and Jakarta ended down 0.74 per cent, or 32.50 points, at 4,386.26.

Shanghai, Hong Kong, Taipei and Kuala Lumpur were closed for the Lunar New Year holiday.

Global equities tanked last week after the US Federal Reserve said it would further cut its stimulus programme, sparking fears of a flight of capital from developing nations while also sending their currencies falling against the dollar.

Even figures showing the US economy grew much quicker than expected could not ease the falls.

On Friday, the Dow sank 0.94 per cent, the S&P 500 fell 0.65 per cent and the Nasdaq lost 0.47 per cent.

Earlier in Europe on Friday the FTSE 100 in London ended 0.43 per cent lower, Frankfurt's DAX 30 dropped 0.71 per cent and the CAC 40 in Paris slid 0.34 per cent.

"There's still some nervousness about emerging markets," investment adviser Christopher Macdonald told Dow Jones Newswires. "People are wondering if the jitters we saw last month are a sign of some bigger dislocation in the market."

Adding to the downbeat outlook was official data from China pointing to a slowdown in manufacturing activity in the world's number two economy and key driver of global growth.

The purchasing managers' index (PMI) fell to 50.5 in January from 51 in December and 51.4 in November, the National Bureau of Statistics and the China Federation of Logistics and Purchasing said. Any figure above 50 indicates expansion while anything below signals contraction.

The news came days after banking giant HSBC's China PMI came in at a six-month low of 49.5.

In forex trade, the euro fetched US$1.3490 and 137.91 yen, against US$1.3487 and 137.61 yen.

However, the single currency is well down from the US$1.3541 and 138.98 yen earlier Friday in Tokyo.

The unit suffered on Friday after official data showed eurozone inflation fell to 0.7 per cent in January, fuelling fears of deflation.

Also on Friday, retailers in Germany, Europe's biggest economy, reported a shock drop in business last month, according to volatile data produced by the federal statistics office Destatis.

The dollar was at 102.14 yen compared with 102.03 yen in New York on Friday.

On oil markets, New York's main contract, West Texas Intermediate for March delivery, eased 14 cents to US$97.35 in afternoon trade. Brent North Sea crude for March was down up four cents at US$106.44.

Gold fetched US$1,243.03 an ounce at 0800 GMT, compared with US$1,257.30 late Friday.

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