Asian stocks slipped on Wednesday following broad losses on Wall Street as upbeat US service sector data added to speculation the Federal Reserve will soon start reeling in its stimulus.
The euro eased further after the European Union downgraded its growth forecast for the eurozone, a week after soft inflation figures raised concerns over the bloc.
Tokyo was flat at the break, Hong Kong was 0.15 percent lower, Shanghai dropped 0.31 percent and Sydney gave up 0.28 percent, while Seoul was flat.
While the focus is on US third-quarter growth data and October jobs figures due out later this week, the non-manufacturing numbers indicated the economy is showing signs of strength.
The ISM purchasing managers index for the service sector rose to 55.4 percent in October — up from a September reading of 54.4 percent and much higher than the expected 54.0 percent. A figure above 50 points to growth while anything below indicates contraction.
Analysts highlighted a surge in the employment reading for the services sector, which accounts for about 80 percent of private-sector jobs.
The positive numbers show the recovery in the world’s number one economy is gaining traction but raise questions about the future of the Fed’s stimulus.
The bank has said it will only begin cutting back on its $85 billion a month bond-buying scheme — which has been credited with sparking a global stocks rally — once the economy is strong enough.
“The… data indicated that the impact of the US government’s partial shutdown (at the start of October) was limited,” Hiroichi Nishi, general manager of equities at SMBC Nikko Securities, told Dow Jones Newswires.
On Wall Street, the Dow eased 0.13 percent, the S&P 500 dipped 0.28 percent and the Nasdaq edged up 0.08 percent.
The euro remained under pressure after the European Union cut its 2014 growth forecast for the 17-nation eurozone to just 1.1 percent, down from the 1.2 percent it forecast in May. It left unchanged its forecast of a 0.4 percent contraction for this year.
Data last week showed inflation at just 0.7 percent in the eurozone in October, its lowest in four years, raising concerns over deflation while putting pressure on the European Central Bank to cut interest rates.
The single currency bought $1.3468 and 132.66 yen in early Tokyo trade, compared with $1.3474 and 132.76 yen in New York on Tuesday. It is well down from the $1.3738 and 135.35 yen in the middle of last week before the inflation data.
The dollar stood at 98.44 yen, against 98.53 yen.
Oil prices rose. New York’s main contract, West Texas Intermediate (WTI) for December delivery, gained 35 cents to $93.72 a barrel in morning Asian trade, while Brent North Sea crude for December climbed 31 cents to $105.64.
Gold dropped to $1,310.75 per ounce at 0210 GMT compared with $1,311.73 on Tuesday.
Source: AFP
