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Asian shares suffer after Wall St losses

Asian markets mostly sank on Friday, extending the previous day's losses after disappointment on Wall Street over data showing the first fall in Chinese manufacturing activity in six months.

HONG KONG: Asian markets mostly sank on Friday, extending the previous day's losses after disappointment on Wall Street over data showing the first fall in Chinese manufacturing activity in six months.

Japan's Nikkei share index suffered another bruising day after the yen rallied against the dollar in New York as investors looked for safer investments.

Tokyo tumbled 1.94 per cent, or 304.33 points, to 15,391.56, Sydney fell 0.42 per cent, or 22.1 points, to 5,240.9 and Seoul ended 0.36 per cent lower, giving up 7.03 points to sit at 1,940.56.

Hong Kong closed 1.25 per cent lower, giving up 283.84 points to 22,450.06 but Shanghai ended up 0.60 per cent, adding 12.21 points to 2,054.39.

Global markets were sent tumbling on Thursday after HSBC said a preliminary reading of its purchasing managers' index (PMI) for China fell to 49.6 in January.

The index is a closely watched gauge of the health of the Asian economic powerhouse. A reading above 50 indicates growth, while anything below signals contraction. The last time the figure for China dropped below the critical point was in July, when it stood at 47.7.

In other markets, Taipei ended flat, edging up 3.21 points to 8,598.31, while Manila rose 0.35 per cent, or 21.45 points to 6,191.50.

Losses on Thursday in Asia were followed by a sell-off in Europe and New York. On Wall Street the Dow dived 1.07 per cent, the S&P 500 fell 0.89 per cent and the Nasdaq lost 0.57 per cent.

US shares were also weighed down by underwhelming corporate results, including from computer maker IBM and defence giant Lockheed Martin.

The weak China figures raised concerns about the global economic outlook, which in turn dampened investor appetite for riskier bets.

On forex markets the yen benefited from the subdued mood. In New York the dollar dived to 103.34 yen on Thursday from 104.39 yen earlier in the day in Tokyo. In afternoon Japanese trade, the greenback was virtually unchanged at 103.36 yen.

In other currency trade, the euro bought US$1.3685 and 141.47 yen in Tokyo on Friday, compared with US$1.3692 and 141.49 yen in New York.

The data from China -- a key driver of global growth -- fuelled concerns about emerging markets at a time when the US Federal Reserve is winding down its stimulus programme, leading foreigners to repatriate their investments to the West.

Among the worst affected is Argentina, which on Thursday saw the value of the peso slump 11.1 per cent against the dollar, its worst fall since 2002 and creating deeper challenges for a government wrestling with falling foreign exchange reserves and rising inflation.

Eyes will now turn to next week's meeting of the Fed's policy committee meeting to see if it announces any further cuts to its giant stimulus programme.

At its last meeting it said it would trim the bond-buying scheme by US$10 billion a month to US$75 billion from January, citing a pick-up in the US economy.

In Hong Kong, Chinese computer maker Lenovo rose 2.9 per cent after announcing on Thursday that it would buy IBM's low-end server business for US$2.3 billion.

The move will give Lenovo a platform to compete in that sector with US giants Dell and Hewlett-Packard and help it diversify away from the slumping PC market.

South Korean electronics giant Samsung ended up 0.62 per cent despite reporting its first fall in quarterly profit in two years owing to a one-off bonus, a strong won and slowing sales of its high-end smartphones.

On oil markets New York's main contract, West Texas Intermediate for March delivery, was up 25 cents at US$97.57 in afternoon trade while Brent North Sea crude for March rose two cents to US$107.60.

Gold fetched US$1,257.50 at 0800 GMT compared with US$1,245.30 late Thursday.

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