09/30/2011 03:08 EDT | Updated 11/29/2011 05:12 EST

Asian stock markets volatile after mixed data on US economy, boost from Europe debt move fades

BANGKOK - World stocks tumbled Friday as the boost from Europe's move to contain its debt crisis faded and mixed U.S. economic data reinforced pessimism about recovery prospects.

Benchmark oil rose above $82 a barrel while the dollar gained against the euro and the yen.

European shares slipped in early trading. Britain's FTSE 100 fell 1 per cent to 5,146.91. Germany's DAX lost 1.6 per cent to 5,550.72 and France's CAC-40 fell 0.8 per cent to 3,002.43.

Wall Street also appeared headed lower, with Dow Jones industrial futures down 0.7 per cent to 11,020 and S&P 500 futures slipping 0.7 per cent to 1,147.80.

Japan's Nikkei 225 swung between gains and losses before closing fractionally lower at 8,700.29. South Korea's Kospi also was in and out of positive territory before settling marginally higher at 1,769.65.

Australia's S&P/ASX 200 gained less than 0.1 per cent to 4,008.60, while shares in Hong Kong, Shanghai and Shenzhen sank after data showed China's manufacturing continued to stagnate in September.

Hong Kong's Hang Seng slumped 2.3 per cent to 17,592.41. Mainland's Shanghai Composite Index fell 0.3 per cent to 2,359.22 and the smaller Shenzhen Composite Index lost 0.2 per cent to 1,004.52.

On Thursday, buoyant investors plunged into stocks after German lawmakers approved new powers to fortify a fund aimed at helping countries that use the euro common currency to deal with heavy debt loads. But passage was expected and the boost to sentiment short-lived.

"The bottom line is that there is still a huge degree of (skepticism) on the ability of policymakers to resolve the crisis in the eurozone periphery while growth worries have not receded," Credit Agricole CIB said in a research note.

"It may be difficult to turn sentiment around as we go into the final quarter of the year, especially as those investors registering profits for the year may want to capitalise on these profits rather than sit through continued volatility in the weeks ahead."

In Tokyo, Japanese auto parts company Furukawa Electric Co. tumbled 5.3 per cent, a day after agreeing to plead guilty to price-fixing in the U.S.

Blue chip property shares in Hong Kong were sharply lower amid fears of a downturn following steps by the government to cool off its red-hot real estate sector. China Overseas Land & Investment plunged 3.9 per cent and China Resources Land tumbled 8.5 per cent.

Banking shares were also lower. Hong Kong-listed Agricultural Bank of China, the country's largest rural lender, plummeted 8.5 per cent. China Construction Bank Corp. fell 5.7 per cent. Australia's Westpac Banking Corp. dropped 1 per cent, and Japan's Mitsubishi UFJ Financial Group was 0.3 per cent down.

Some Chinese stocks came under assault following the release of a manufacturing index that adds to evidence China's rapid growth is slowing. Anhui Conch Cement Co. dropped 8.9 per cent. Zijin Mining Group Co. fell 3.8 per cent.

Shares in GOME Electrical Appliance Holdings, China's largest appliances retailer, plunged 21.8 per cent in Hong Kong as investors dumped its shares following an investment rating downgrade by Credit Suisse. That followed the company's announcement earlier this week that it plans a new property development joint venture with a company owned by Huang Guangyu, Gome's founder, who is serving a 14-year sentence for bribery and insider trading.

In New York on Thursday, the Dow Jones industrial average ended higher after data showed first-time applications for unemployment benefits fell to a five-month low. The U.S. government also raised its estimate of economic growth in the April-June period.

But other economic reports were weak. A trade group reported that chief executives of the nation's largest companies are more pessimistic than they were just three months ago. Also, fewer Americans signed contracts to buy homes in August, the second straight month of declines.

The Dow Jones industrial average rose 1.3 per cent to close at 11,153.98 after a day of big swings. The Standard & Poor's 500 index rose 0.8 per cent to 1,160.40. The Nasdaq composite index lost 0.4 per cent to 2,480.76.

In Europe on Thursday, stocks surged after Germany passed a measure to expand the powers of a regional bailout fund.

The measure, which must be approved by all 17 countries that use the euro, will allow the bailout fund to buy government debt and lend money to troubled European countries. Finland approved the measure Wednesday.

Oil gained following the news out of the U.S. and Europe. Benchmark oil for November delivery was up 56 cents to $82.70 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose 93 cents to finish at $82.14 per barrel on the Nymex on Thursday.

In currency trading, the euro slipped to $1.3523 from $1.3591 late Thursday in New York. The dollar rose slightly to 76.82 yen from 76.79 yen.


AP Business Writer Elaine Kurtenbach in Shanghai contributed.