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Nikkei Markets

Asian stocks fall as weak US data adds to worries over global economy

Hyundai Motor, Kia fall on lower China sales

HONG KONG (Nikkei Markets) -- Asian shares outside of Japan declined Friday after weaker-than-expected U.S. data exacerbated worries over the global economic outlook.

The Nikkei Asia300 Index slid 0.3% to close at 1,245.37.

Asian investors had to contend with additional evidence that growth in the world's largest economy was slowing down. The Institute for Supply Management said yesterday that its gauge of U.S. non-manufacturing activity declined to 52.6 last month, the lowest in three years, from 56.4 in August. Economists polled by Reuters had expected a reading of 55.

The disappointing services data amplified worries over the U.S. economic outlook. Earlier this week, the ISM manufacturing gauge had fallen to a 10-year low and private payrolls additions missed expectations.

Goldman Sachs said in light of the ISM services data, it is lowering its third-quarter GDP tracking estimate by one 10th to an annual rate of 1.9% quarter-on-quarter.

The raft of weak U.S. data this week has led to traders increasing bets that the Federal Reserve will cut rates this month. There is now a 90% chance that the Fed will cut rate on Oct. 30, nearly double of what it was a week ago. DBS said that while its formal call remains for no further rate cuts this year, the chance of the Fed moving at least one more time this year is clearly rising.

In movers on the A300 on Friday, Samsung Electronics added 0.8%. The South Korean technology major reports preliminary September quarter earnings next week. SK Hynix, the world's biggest memory chip maker behind Samsung, ended 1% higher.

Hyundai Motor declined 1.6% and its affiliate Kia Motors dropped 3.5%. The companies said Friday their combined sales in China declined 16% in the January-August period from the same period last year, Yonhap News Agency reported.

Godrej Consumer Products climbed 1.2%. The company reportedly said Friday that it had recorded a higher than mid-single digit volume growth in India in the September quarter.

China Evergrande Group jumped 5.3% after the Chinese property developer's September contracted sales surged 32% on-year. Its peer China Overseas Land & Investment added 0.6%.

Meanwhile, India's benchmark BSE Sensex index closed 1.1% lower. The country's Monetary Policy Committee cut rates by 25 basis points to 5.15%, the lowest level in nearly a decade, to help revive economic growth. The reduction was on expected lines. The MPC also pared its growth estimates for this fiscal year to 6.1% from 6.9% earlier.

The Philippine Stock Exchange PSEi Index jumped 2.1% amid expectations of more monetary easing after consumer prices last month increased at the slowest pace in more than three years. BDO Unibank advanced 4%.

--Nimesh Vora

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