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Asian markets mostly dip, as European woes grow

Asian stocks mostly dipped on Thursday (Aug 7), as concerns over the European economy and international conflicts grew.

HONG KONG: Asian stocks mostly dipped on Thursday (Aug 7), as concerns over the European economy and international conflicts grew.

Traders said sentiment had also been hit by news that several huge mergers had collapsed, including 21st Century Fox's bid for Time Warner and that of Japanese-controlled US wireless operator Sprint for T-Mobile.

"A perfect storm of low volumes, geopolitical worries and pulled mergers is conspiring to keep markets on the back foot," said Chris Beauchamp, market analyst at IG trading group.

Sydney shed 3.0 points, or 0.05 per cent, to finish at 5,509.0, while Seoul slipped 0.30 per cent or 6.22 points to close at 2,054.51.

Hong Kong was down 0.80 per cent or 196.57 points to 24,387.56 at the close. Shanghai dropped 1.34 per cent, or 29.80 points, to 2,187.67 and Shenzhen fell 0.92 per cent, or 10.83 points, to end at 1,166.50.

Tokyo's Nikkei rose 0.48 per cent or 72.58 points to close at 15,232.37, bucking the regional trend, as late bargain-hunting dragged the Japanese market out of negative territory and snapped a five-day losing streak.

The falls in other Asian markets followed losses in London, Paris, Frankfurt and Lisbon. Official data showed Italy slid back into recession in the second quarter, prompting renewed fears of about the health of the eurozone.

'RISK OF NEW RECESSION'

"It isn't just Ukraine. Even without the risk of some kind of Russian intervention as the Ukrainian army moves to crush separatists, Europe's economy is dead in the water and at risk of a new recession," Reorient Group told Dow Jones Newswires.

In the US, stocks edged higher on Wednesday (Aug 6) despite new Russian sanctions against the West, with investors saying the economy was "insulated" from conflicts in the Middle East and Europe. The Dow Jones Industrial Average gained 0.08 per cent to 16,443.34, while the broad-based S&P 500 was essentially flat. The tech-rich Nasdaq Composite Index rose 2.22 points (0.05 per cent) to 4,355.05.

Jack Ablin, chief investment officer at BMO Private Bank, said: "The US appears to be more of a safe haven. Investors are trying to cosy back up to the US where there is economic growth and where our economy is somewhat insulated from the geopolitical confrontations that are going on."

On the currency markets, the euro edged up in Asia on Thursday ahead of central bank meetings as investors focus on whether European policymakers will hint at further monetary easing. In Tokyo afternoon trading, the European single currency bought US$1.3385 and 136.93 yen, against US$1.3384 and 136.66 yen in New York on Wednesday. The dollar strengthened to 102.30 yen against 102.11 yen.

In oil trade, the US benchmark West Texas Intermediate for September delivery dipped 24 cents to US$96.68 in late-afternoon trade, after falling 46 cents in New York to its lowest closing level since February 3. Brent crude for September eased eight cents to US$104.51.

Gold fetched US$1,305.20 an ounce by 1055 GMT compared with US$1,293.88 late on Wednesday.

In other markets:

-- Bangkok was flat, shedding 0.14 points to 1,522.27.

Airports of Thailand gained 2.82 per cent to 219.00 baht, while oil company PTT added 0.31 per cent to 326.00 baht.

-- Jakarta ended up 0.17 per cent, or 8.75 points, at 5,066.98.

Mining firm Aneka Tambang gained 3.27 per cent to 1,265 rupiah, while palm oil company Wilmar Cahaya Indonesia slipped 2.02 per cent to 1,940 rupiah.

-- Kuala Lumpur fell 0.14 per cent, or 2.60 points, to close at 1,867.32.

Tenaga Nasional eased 1.63 per cent to 12.10 ringgit, Public Bank lost 0.20 per cent to 19.76 while Malayan Banking added 0.30 per cent to 10.00 ringgit.

-- Manila was up 0.09 per cent, or 6.24 points, to 6,955.21.

Philippine Long Distance Telephone Co. bucked the trend to fall by 2.27 per cent to 3,014 pesos, while Nickel Asia Corp. gained 4.11 per cent to 39.25 pesos.

-- Mumbai retreated 0.30 per cent, or 76.26 points, to 25,589.01 points.

Bhushan Steel fell 19.99 per cent to 243.70, while Bharti Infratel fell 6.59 per cent to 253.05 rupees.

-- Singapore shed 0.18 per cent, or 6.01 points, to 3,314.22.

DBS Bank eased 1.25 per cent to S$18.14 while vehicle distributor Jardine Cycle & Carriage was down 2.15 per cent to S$44.97.

-- Taipei fell 12.53 points, or 0.14 per cent, to 9,131.44.

TSMC rose 0.83 per cent to NT$121.5, while Formosa Plastics Corp. fell 1.18 per cent to NT$75.3.

-- Wellington rose 0.10 per cent or 5.28 points to 5,097.51.

Fletcher Building was up 1.02 per cent at NZ$8.95, with Telecom Corp rising 0.88 per cent to NZ$2.87.

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