Asia stocks fall on dismal US hiring report

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By PAMELA SAMPSON, Associated Press

BANGKOK (AP) — Asian stock markets took a beating Monday as another setback for the U.S. economic recovery sent investors fleeing.

Weak U.S. hiring in May pushed Wall Street indexes to their biggest declines of the year on Friday. The Dow Jones industrial average fell 275 points, its biggest one-day decline since November.

The dismal report came on the heels of other data that showed weak economic conditions in Europe and Asia. Unemployment in the 17 countries that use the euro currency stayed at a record-high 11 percent in April.

There were signs that growth in China, which helped sustain the global economy through the 2008-2009 recession, is slowing significantly. China's manufacturing weakened in May, according to surveys released Friday.

Japan's Nikkei 224 index dropped 1.9 percent to 8,277.56 and Hong Kong's Hang Seng tumbled 2.4 percent to 18,119.01.

South Korea's Kospi shed 2.9 percent to 1,781.99. Key indexes in mainland China and Singapore fell, while benchmarks in Taiwan and Indonesia were down more than 3 percent.

"US jobs numbers were not the only weak reading as manufacturing output data in China and the US were also lower, and euro area unemployment reached a record level," Stan Shamu of IG Markets in Melbourne, said in an email.

"There aren't many positives for risk assets at the moment," he said.

American employers added just 69,000 jobs in May, the fewest in a year, and the unemployment rate increased to 8.2 percent from 8.1 percent. Economists had forecast a gain of 158,000 jobs.

The report, considered the most important economic indicator each month, also said that hiring in March and April was considerably weaker than originally thought.

But the bleak outlook was balanced by what some analysts said was a sell-off that could result in good bargains for oversold stocks.

"I think it's good in terms of trading, because when there is some panic selling, then the selling pressure will be released and the short-term bottom will be there, suggesting a technical rebound," said Linus Yip, strategist at First Shanghai Securities in Hong Kong.

Falling prices for industrial metals like copper and aluminum, which are widely used in construction and manufacturing, hurt mining and resource shares. Anglo-Australian mining giant Rio Tinto Ltd. fell 4.2 percent. Hong Kong-listed Jiangxi Copper Co. lost 3.4 percent. Energy Resources of Australia plummeted 8.8 percent.

Heavy industrial shares also faltered. Japan's Nishimatsu Construction Co. plunged 8.3 percent and Australia's BlueScope Steel Ltd. sank 7.8 percent.

Japanese vehicle makers were battered. Toyota Motor Corp. and Mitsubishi Motors Corp. both fell 4 percent. Honda Motor Corp. lost 4.1 percent and Nissan Motor Co. dived 4.2 percent.

Sony Corp., which fell below 1,000 yen for the first time since August 1980 on Monday, briefly touching 990 yen. Sony, which has struggled to turn around its money-losing TV business, last month reported a record annual loss of 457 billion yen ($5.7 billion) for its fourth straight year of red ink.

On Friday, the Dow closed down 2.2 percent at 12,118.57. The Standard & Poor's 500 index fell 2.5 percent to 1,278.04. The Nasdaq dropped 2.8 percent to 2,747.48.

The Nasdaq composite index has dropped more than 10 percent since its 2012 peak — what traders call a market correction. The S&P 500 is just a point above correction territory.

Benchmark oil for July delivery was down $1.17 to $82.06 per barrel, the lowest since October, in electronic trading on the New York Mercantile Exchange. The contract fell $3.30 to settle at $83.23 in New York on Friday.

In currency trading, the euro fell to $1.2401 from $1.2424 late Friday in New York. The dollar rose to 78.16 yen from 78.08 yen.

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