Asia stocks track US down after bleak housing data

HONG KONG — Asian stock markets dropped Friday as signs the U.S. housing market was still suffering reinforced concerns about a weak recovery in the world’s largest economy.

Japanese shares slumped 2.4 percent, while the dollar fell against major currencies and oil prices rebounded modestly after a two-day plunge.

Asia’s move lower followed a modest fall on Wall Street, where investors pulled out of stocks amid worries about the sustainability of this year’s rally and news of an unexpected drop in sales of existing homes in August.

Investors are also increasingly nervous that governments will prematurely unwind emergency measures that have gotten money flowing through financial markets since the crisis erupted last year. This week, the U.S. Federal Reserve announced it would slow its purchases of mortgage-backed securities, while European Central Bank said it would curtail certain types of dollar-denominated loans.

“Much of the gains across asset classes so far this year — to levels not justified by fundamentals — have been a direct result of cheap and easily available funding,” Dariusz Kowalczyk, chief Investment strategist for SJS Markets in Hong Kong, wrote in a note. “News that the amount and availability of liquidity will be imminently limited caused fears that asset bubbles will be diffused sooner.”

In Japan, the Nikkei 225 stock index shed 257.80 points, or 2.4 percent, to 10,287.03 after Nomura, the country’s leading brokerage, announced its biggest shares sale ever, weighing on the broader market.

Hong Kong’s Hang Seng lost 0.6 percent to 20,932.98, and China’s Shanghai index dropped 1.1 percent.

Elsewhere, South Korea’s Kospi shed 0.6 percent, India’s Sensex edged lower by 0.1 percent and Indonesia’s index lost 1.4 percent. Taiwan and Australia’s markets were up 0.4 percent and 0.5 percent respectively.

Overnight on Wall Street, the Dow fell 41.11, or 0.4 percent, to 9,707.44.

The S&P 500 index fell 10.09, or 1.0 percent, to 1,050.78, and the Nasdaq composite index fell 23.81, or 1.1 percent, to 2,107.61.

U.S. futures pointed to a lower open on Wall Street Friday. Dow futures were down 22, or 0.2 percent, at 9,613.

Oil prices clawed back some losses in Asia, with benchmark crude for November delivery up 67 cents at $66.56.

The dollar weakened to 90.78 yen from 91.26 yen. The euro gained to $1.4679 from $1.4661.