Asian stocks dip on Europe fears, China trade data

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By KELVIN CHAN, Associated Press

HONG KONG (AP) — Asian stocks dipped Thursday, as investor fears about climbing borrowing rates in Spain and political turmoil in Greece overshadowed optimism about upbeat results at Japanese carmaker Toyota.

Japan's Nikkei 225 index slid marginally to 9,040.66 and South Korea's Kospi shed 0.1 percent to 1,947.91. Hong Kong's Hang Seng fell 0.9 percent to 20,141.96.

Mainland Chinese stocks fell, with the Shanghai Composite Index declining 0.2 percent to 2,404.15 after the release of disappointing Chinese trade data.

Australia's S&P/ASX 200 was nearly unchanged at 4,276.50, while benchmarks in Singapore, Thailand and Indonesia were lower. Key Benchmarks in India, Taiwan and New Zealand rose.

"The Eurozone crisis remains in the spotlight, keeping sentiment under pressure," strategists at Credit Agricole CIB in Hong Kong wrote in a note to clients.

World markets have been roiled this week by political instability in Europe. Greece has been left without a government since elections on Sunday, adding to growing worries that it will drop out of the euro currency union or be forced out.

The turmoil shook markets in Spain, where the interest rate that the government must pay on benchmark 10-year bonds rose to an uncomfortably high level of 6.06 percent. Rates of above 7 percent are seen as unsustainable, and forced Greece, Ireland and Portugal to ask for bailouts.

"The European turmoil has kept investors jittery here in Hong Kong, but after dropping five days in a row, the market is oversold," said Louis Wong, a director at Phillip Securities. "So we saw a rebound this morning, but the rebound is quite weak, because now the worry seems to have moved to Spain."

Chinese stocks were lower amid the release of data that showed a wider trade surplus in April, mainly due to anemic imports. Weak import growth raised fears the world's second-biggest economy wasn't doing enough to stimulate domestic demand amid an economic slowdown.

Stocks failed to take any comfort from positive news from Toyota Motor Corp., which rose 1.7 percent a day after the company said quarterly profit more than quadrupled. The Japanese automaker also made an upbeat forecast as it recovers from a sales plunge caused by the tsunami in Japan last year.

Hong Kong's Cathay Pacific Airways slid 5.4 percent after the airline said that first half earnings would be disappointing because of a cloudy global economic outlook and high fuel prices that are forcing it to cut costs and reduce flights on some long-haul routes.

Singapore Airlines Ltd. fell 2.5 percent after the carrier posted its first loss since 2009 in the first quarter as higher fuel prices sent costs up.

On Wall Street on Wednesday, the Dow closed lower for the sixth day in a row, down 0.8 percent at 12,835.06. The Standard & Poor's 500 index fell 0.7 percent to 1,354.58 and the Nasdaq composite average Nasdaq dropped 0.4 percent to 2,934.71.

Benchmark oil for June delivery was down 33 cents at $96.48 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell 20 cents to finish at $96.81 per barrel in New York on Wednesday.

In currencies, the euro rose to $1.2947 from $1.2945 late Wednesday in New York. The dollar was unchanged at 79.68 Japanese yen.

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