US debt fears spook Asian shares

ASIAN stocks were mixed on Thursday on nervousness about the progress of talks aimed at averting a US debt default despite President Barack Obama backing a cross-party plan. Markets were given some support as the outlook in the eurozone brightened after France and Germany came to an agreement on an aid strategy for indebted Greece. Tokyo ended flat, edging up 4.49 points to 10,010.39, Seoul closed 0.46 per cent, or 9.91 points, lower at 2,145.04. Hong Kong closed flat, edging down 16.40 points to 21,987.29. Shanghai lost 1.01 per cent, or 28.31 points, to 2,765.89 after preliminary figures from HSBC showed manufacturing in China had declined in July for the first time in a year. Adding to the downbeat mood was HSBC's preliminary purchasing managers index, or PMI, for China, which fell to 48.9 in July from a final reading of 50.1 in June. Start of sidebar. Skip to end of sidebar. End of sidebar. Return to start of sidebar. The figure represents the first contraction since July 2010 and is the lowest since March 2009. A reading above 50 indicates the sector is expanding, while a reading below 50 indicates contraction. The bank will publish its final figures on August 1. HSBC said it expected a contraction, which comes after five interest rate hikes since October, which Beijing introduced as it tries to tame inflation, which hit a three-year-high 6.4 per cent in June. A slowdown in activity in China is considered bad for other economies as many nations rely on the Asian giant to help propel their own growth. In other markets, Singapore rose 0.38 per cent, Taipei ended 0.13 per cent higher, Manila fell 0.16 per cent, Kuala Lumpur rose 0.21 per cent, Jakarta rose 0.43 per cent, Bangkok added 0.25 per cent, and Indian shares slid 0.36 per cent.