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Shares in Asia down following Wall Street lead, Euro Zone concerns

Published 07/21/2016, 11:01 PM
Updated 07/21/2016, 11:04 PM
Asian shares weaker

Asian shares weaker

Investing.com - Asian shares fell on Friday as markets followed the trend on Wall Street over concerns about growth prospects in the Euro Zone.

The Shanghai Composite eased 0.31%, while the Nikkei 225 fell 0.89% despite some mildly upbeat data from Tokyo. Japan reported the provisional manufacturing PMI for July at 49.0, better than the expected level of 48.3, and higher than 48.1 in June, though still below expansion.

In Sydney, the S&P/ASX 200 declined 0.32%.

Markets in Asia showed little reaction to remarks by Republican nominee for president Donald Trump who called for renegotiating or scrapping trade deals, including the Trans-Pacific Partnership, and criticized the economic relationship with China as lopsided in favor of Beijing.

Overnight, U.S. stocks fell sharply as the Dow Jones Industrial Average halted a nine-day winning streak, after European Central Bank president Mario Draghi hinted that the Governing Council could be ready to implement new easing measures following Thursday's decision to hold interest rates steady.

Draghi's comments dragged down equities on Wall Street just before Noon on Thursday, helping end the longest winning streak on the Dow in more than three years. While noting that the U.K's decision to leave the European Union has created significant headwinds on the economic outlook in the euro area, Draghi stressed that the ECB could use all of the tools at its disposal in the near-term future to boost the economy if needed. Consequently, investors in the euro area departed from their positions in U.S. equities, returning back to riskier stocks at home, amid broad signals that the ECB could lower rates and extend the scope of its Quantitative Easing program when it meets again in September.

The Dow lost 77.80 or 0.42% to 18,517.23, while the S&P 500 Composite index fell by 7.85 or 0.36% to 2,165.17, as both indices retreated from record territory on Thursday.
On the S&P 500, eight of 10 sectors closed in the red, as stocks in the Energy, Industrials and Technology industries lagged. Stocks in the Utilities and Health Care sectors led, inching higher on the session.

The NASDAQ Composite index, meanwhile, fell 16.03 or 0.31% to 5,073.90 , after considerable losses from Intel (NASDAQ:NASDAQ:INTC) weighed on semiconductor stocks.

Both the Dow and S&P 500 suffered their worst one-session declines in more than two weeks.

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