HONG KONG — Asian stocks continued to sag Friday, sending Tokyo’s index to its eighth straight loss, as uncertainty about company earnings weighed on expectations of a faster turnaround in the world economy. European markets opened lower. The back-and-forth trade in Asia wrapped up a lacklustre week that saw the region’s major benchmarks pull back amid concerns the recent rally had overestimated the speed and scale of any rebound in global growth. Oil prices fell below US$60 a barrel. Investors were less than encouraged by the tepid gains on Wall Street, where stocks inched up following aluminum maker Alcoa Inc’s narrower-than-expected second quarter loss of nearly half a billion dollars. Weak sales reports from U.S. retailers and more pain in the country’s labour market did little to lift the mood. The markets cratered after last week’s troubling signs of growing job losses in the U.S. and Europe led investors to reassess the recovery story that drove a number of markets 30 per cent higher or more between March and June. Now, analysts say there seems to be a lack of direction — evidenced by lower volumes and volatility in recent days — as many investors await more company results for clues about the economy’s prospects or take a break during the summer months. “I think after the massive rally it’s only natural that markets are consolidating now,” said Khiem Do, a Hong Kong-based fund manager who helps oversee more than $8 billion in Asian equities at Baring Asset Management. “I think the surprise is that the correction has not been more severe.” As trading got underway in Europe, Britain’s FTSE 100 lost 0.3 per cent, Germany’s DAX was down 0.1 per cent and France’s CAC 40 dropped 0.3 per cent. U.S. stock futures were lower suggesting more losses Friday on Wall Street. Dow futures were down 30, or 0.4 per cent, at 8,104 and S&P futures fell 2.3, or 0.3 per cent, to 876.70. Markets in Asia gyrated throughout the day before edging down in the afternoon. In Tokyo, the Nikkei closed off slightly, losing 3.78 points, or 0.04 per cent, to 9,287.28. The benchmark last ended higher on Tuesday, June 30. The weak trading in Japan came as its central bank said wholesale prices fell 6.6 per cent in June from a year earlier — the biggest fall on record and the latest evidence that deflation is returning to the world’s second-biggest economy. Elsewhere, Hong Kong’s Hang Seng fell 82.17, or 0.5 per cent, to 17,708.42. South Korea’s Kospi fell 0.2 per cent and Shanghai’s index shed 0.3 per cent. Meanwhile, Australia’s index gained 0.8 per cent and Singapore’s market fell 0.2 per cent. In a sign of fading interest in equities markets, at least for now, people continued to pull money from funds that invest in stocks in recent days. The week ending July 8 saw investors withdraw nearly $1.9 billion from global equities, according to a survey by EPFR Global, a Boston-based firm that tracks global fund flow data. That compared to $2.8 billion the week before. Funds that invest in so-called emerging markets like China and Brazil, among the best performing in recent months, were also hit with investors yanking about $540 million for the week amid doubts about the recovery’s strenghth. In New York Thursday, the Dow Jones industrial average rose 4.76, or 0.1 per cent, to 8,183.17, the second day of modest gains after a 161-point drop on Tuesday. The blue chips crossed zero 108 times during trading. The broader Standard&Poor’s 500 index rose 3.12, or 0.4 per cent, to 882.68. Oil prices were down in Asia, with benchmark crude for August delivery falling 35 cents to $60.06 a barrel after earlier trading below $60. The contract rose 27 cents Thursday. The dollar dropped to 92.70 yen compared to 93.02 yen. The euro tanked to $1.3914 from $1.4018.

Source