Asia stock markets fall ahead of Fed meeting

By PAMELA SAMPSON,AP Business Writer Updated at 2013-07-29 06:15:11 +0000


BANGKOK (AP) — Asian stock markets fell Monday as traders awaited a packed schedule of data releases this week in the U.S. and a key meeting of the Federal Reserve.

Japan's benchmark Nikkei 225 dropped 2.2 percent to 13,824.18 as the yen continued to reverse some its recent fall.

Linus Yip, strategist at First Shanghai Securities in Hong Kong, said the Nikkei's sharp decline sparked jitters elsewhere in Asia. He added that slowing growth in China presented an additional reason for caution.

South Korea's Kospi fell 0.5 percent to 1,900.27, hurt by losses among technology shares. Hong Kong's Hang Seng lost 0.6 percent to 21,843.60. On the Chinese mainland, the Shanghai Composite Index shed 1.6 percent to 1,979.38.

Analysts expect to see a drop in unemployment when the U.S. Labor Department releases employment figures for July at the end of the week, but some say it will not be enough to prompt an immediate scaling back of the Fed's bond-buying program, which has been helping to buoy the economy.

Traders have been cautious in recent days ahead of the Fed's two-day meeting, which begins Tuesday, for hints of when the central bank will start reducing its monetary stimulus.

"Our guess is that it won't happen until December and it could be delayed further yet," said analysts at DBS Bank Ltd. in a report.

Since late last year, the Fed has been buying $85 billion in Treasury and mortgage bonds a month in a move that has kept long-term rates near record lows and supported economic recovery.

Global stocks mostly dropped Friday on concerns that a brusque overhaul of China's industry could slow down the world's second-largest economy. Beijing has ordered companies to close factories in 19 industries where overproduction has led to price-cutting wars. The industry ministry ordered more than 1,400 companies to cut excess capacity and even some companies to close outright.

On Wall Street, the Dow Jones industrial average closed nearly unchanged at 15,558.83. The Standard & Poor's 500 edged up marginally to 1,691.65. The Nasdaq composite index gained or 0.2 percent, to 3,613.16.

In energy trading, benchmark crude fell 53 cents to $104.17 per barrel in electronic trading on the New York Mercantile Exchange. The contract fell 79 cents to close at $104.70 Friday in New York.

The dollar fell to 97.77 yen from 98.32 yen late Friday. The euro rose to $1.3288 from $1.3270.