Asian stocks fall despite Europe, China rate cuts

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Asian markets fell Friday as apparently coordinated action by Europe and China to stimulate the global economy failed to reassure wary investors ahead of US jobs data due later in the day.
The Nikkei 225 index on the Tokyo stock exchange was down 0.36 percent at 9,047.46 points, Hong Kong fell 0.33 percent to 19,743.92 and Sydney was 0.49 percent lower at 4,148.8. Shanghai was down 0.55 percent at 2,189.249 points and Seoul was off 0.75 percent at 1,861.42. The European Central Bank Thursday trimmed eurozone borrowing costs by a quarter of a percentage point to 0.75 percent, in a widely anticipated move, and Denmark followed suit, cutting its key rate by 0.25 percent. Shortly beforehand, the Bank of England announced it was keeping its main interest rate at a record low 0.50 percent and said it would increase its quantitative easing stimulus policy by 50 billion ($78 billion) to boost Britain’s recession-hit economy. The Bank of China also trimmed rates for the second time in a month, a surprise move that analysts said may indicate the world’s second-biggest economy is slowing more quickly than expected.
Markets were disappointed that the widely expected ECB move was not accompanied by additional stimulus measures to tackle the eurozone crisis. China’s central bank did not immediately provide a reason for its surprise rate cut, but analysts said the move could signal that second quarter data due to be released next week could be worse than expected. Cautious investors were also awaiting the June US labour report for signs about the state of the world’s largest economy, and whether it would prompt the US Federal Reserve to step in with fresh easing measures.
“Investors are in a wait-and-see mood now, with important US jobs data due later Friday,” Investrust CEO Hiroyuki Fukunaga told Dow Jones Newswires. On Wall Street, traders shrugged off the rate moves in Europe and China to focus on US data showing weakness in consumer spending.
The Dow Jones Industrial Average ended down 0.36 percent, or 47.15 points, at 12,896.67 on Thursday. The S&P 500-stock index lost 0.47 percent, or 6.44 points, to 1,367.58, while the tech-rich Nasdaq added a bare 0.04 points to 2,976.12.
Concern was spurred by the ICSC June sales report showing same-store sales for big retailers excluding Walmart were only up 0.2 percent from a year ago — a third straight month of weak growth. On currency markets the euro lost more ground in Asian trade Friday. The common currency was changing hands at $1.2377 in Tokyo morning trade, down from $1.2391 in New York late Thursday.