Asian shares fall on bleak China manufacturing data

Tokyo - August was a brutal month for investors.

Asian shares fell on Tuesday as gloomy manufacturing data from China and weak investment figures in Japan augured further uncertainty for investors after a brutal August.
KEEPING SCORE: China's Shanghai Composite Index dropped 1.1 per cent to 3,172.03 after dipping nearly 5 per cent earlier in the session. Japan's Nikkei 225 also recovered some lost ground and was down 1.5 per cent at 18,603.83 by early afternoon. The Hang Seng in Hong Kong lost 0.5 per cent to 21,569.14. South Korea's Kospi slid 0.9 per cent to 1,925.01. Australia's S&P/ASX 200 fell 1.2 per cent to 5,142.80 and shares in Southeast Asia were also mostly lower.
CHINA MANUFACTURING: An official index of Chinese manufacturing fell to a three-year low last month in another sign of slower-than expected growth in the world's No. 2 economy. The manufacturing index based on a survey of factory purchasing managers fell to 49.7 in August from 50.0 in July, indicating a contraction.
ANALYST VIEWPOINT: "While a measure of calm has returned to these markets recently and they have seen relief rallies, many of the underlying negative fundamentals are still in place," Nariman Behravesh, chief economist for HIS, said in a report. "As a result, the downside risks for most commodity prices, exchange rates, and stock markets are likely to persist for some time, while growth in many parts of the world, especially in emerging markets, is likely to deteriorate further."

JAPAN DATA: Measures of industrial production and capital spending, reported Monday and Tuesday, have undershot analysts' estimates, suggesting the economy may not have recovered as strongly as expected this summer from a contraction in the April-June quarter. However, a purchasing managers' index for August showed improvement, with new order growth rising to a seven-month high.
GOODBYE AUGUST: August was a brutal month for investors. Worries over China's slowdown and the timing of an interest rate hike by the Federal Reserve pushed shares sharply lower before moves by the Chinese central bank helped to stabilize the markets, at least temporarily. The Standard & Poor's 500 still finished August down 6.3 per cent, its worst showing since May 2012.
WALL STREET: The Dow Jones industrial average gave up 114.98 points, or 0.7 per cent, to close at 16,528.03 on Monday. The S&P 500 lost 16.69 points, or 0.8 per cent, to 1,972.18 and the Nasdaq composite lost 51.82 points, or 1.1 per cent, to 4,776.51.
ENERGY: Oil prices and energy stocks rose after the US Energy Department cut its estimate for the country's oil production. Benchmark US crude surged $3.98, or nearly 9 per cent, to $49.20 a barrel in New York. However, oil fell back in Asia, with US crude down $1.49 to $47.71 a barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the international standard, dropped $1.56 to $52.59 a barrel.
CURRENCIES: The dollar gained to 120.76 yen from 121.20 yen in the previous global trading session. The euro rose to $1.1270 from $1.1226.

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