Asian stocks fell, sending a regional index to its sixth weekly drop in seven weeks, as signs of slowing growth in China and Japan and concern that Europe’s debt crisis is worsening overshadowed improving US data.
In Taiwan, the TAIEX staged a mild technical rebound on Friday from heavy losses seen in the week, but turnover remained at a low level.
Sentiment was cautious although Wall Street recovered overnight, snapping a three-day losing streak after the latest data on jobless benefit claims in the US was better than expected, dealers said.
“Despite the rebound, many investors were still reluctant to chase prices at the moment amid uncertainty over a market outlook,” Mirae Asset Management analyst Arch Shih (施博元) said.
“With no immediate solution to deal with the debt crisis in Europe, I expect more and more investors will retreat from the trading floor,” he added. “Moreover, political uncertainty ahead of the Jan. 14 presidential election is expected to keep the trading volume at lows.”
The weighted index closed up 20.50 points, or 0.30 percent, at 6,785.09 on Friday. The TAIEX retreated 1.6 percent this week, a second consecutive loss.
The MSCI Asia Pacific Index fell 2.3 percent to 112.45 this week after Moody’s Investors Service and Fitch Ratings warned that Europe faces lower credit ratings as it struggles to contain its debt crisis. Italy sold 3 billion euros of five-year notes on Wednesday with a yield of 6.47, the most since May, 1997.
The Shanghai Composite Index sank 3.9 percent, extending losses for a sixth week.
Chinese manufacturing may contract for a second month, according to a survey released on Thursday by HSBC and Markit Economics. Hong Kong’s Hang Seng Index declined 1.6 percent.
Japan’s Nikkei 225 Stock Average decreased 1.6 percent this week after the Bank of Japan’s tankan survey showed sentiment among the nation’s largest manufacturers deteriorated. South Korea’s KOSPI dropped 1.9 percent. Australia’s S&P/ASX 200 slid 1 percent.
The MSCI Asian gauge declined 18.3 percent this year through Friday, dragging valuations of shares in the gauge to 12.6 times estimated earnings, according to data compiled by Bloomberg.
Financial stocks dropped this week on speculation that a worsening European crisis would hurt banks’ earnings.
India’s SENSEX tumbled to a more than two-year low, despite the central bank’s decision to keep interest rates on hold and indications of possible future cuts.
The 30-share index dropped to 15,425.20 intraday, its lowest since early November, 2009. It recovered to 15,475.75 late on Friday — still down 360.72 points or 2.28 percent.
In other markets on Friday:
Manila gained 0.52 percent, or 22.27 points, from Thursday to close at 4,304.94.
Wellington fell 0.55 percent, or 17.85 points, from Thursday to 3,245.34.