Asia stocks mixed on slowdown signs; Europe gains

By ALEX KENNEDY

SINGAPORE

Asian stock markets were mixed Thursday after fresh evidence of slower U.S. growth blunted appetite for riskier assets like stocks. European shares were higher.

The latest sign of sluggishness in the world's No. 1 economy came from the Federal Reserve's regional survey, a report known as the "beige book." The Fed said economic growth in the U.S. has been steady during the summer in some cities, but was slowing in others like Atlanta and Chicago.

The survey followed a U.S. Commerce Department report that showed durable goods orders fell 1 percent in June. Economists expected a 1 percent gain.

But some analysts believe it is overly pessimistic to predict that the U.S. will slip back into recession.

"We don't believe in a double-dip recession in the U.S.," said Stephen Corry, Asia Pacific chief investment officer for Merrill Lynch Wealth Management. "The global economy will continue to muddle though and that's not a bad backdrop for global equities."

In early trading in Europe, Britain's FTSE 100 rose 0.7 percent, Germany's DAX index gained 0.6 percent, and France's CAC-40 rose 0.5 percent.

Japan's Nikkei 225 stock average fell 0.6 percent to 9,6996.02 as investors locked in profits following a 2.7 percent jump the previous day.

South Korea's Kospi eased 0.2 percent to 1,770.88 while Hong Kong's Hang Seng index was steady at 21,093.82. Australia's S&P/ASX 200 dropped 0.1 percent to 4,524.1 on weakness in banks.

Benchmarks in China, Taiwan, Indonesia, India and Singapore rose.

Asian equities are trading at a 10 percent premium to global stocks on a price-to-book value basis, according to Corry. "We're long-term bullish on Asian equities, but valuations probably don't justify purchasing them right now," he said.

In New York Wednesday, the Dow Jones industrial average finished down 0.4 percent at 10,497.88.The broader Standard & Poor's 500 index fell 0.7 percent to 1,106.13, while the Nasdaq composite index fell 1 percent to 2,264.56.

In currencies, the dollar fell to 87.20 yen from 87.44 yen late Wednesday in New York. The euro rose to $1.3070 from $1.2996.

Benchmark crude for September delivery was up 25 cents at $77.24 a barrel in electronic trading on the New York Mercantile Exchange. The contract dropped 51 cents to settle at $76.99 on Thursday.