Asian stocks narrowly mixed amid China fall

SEOUL, South Korea — Asian stocks were narrowly mixed Thursday after weak economic data sent Wall Street lower, while worries about tighter monetary policy dragged China shares down more than 2 percent.

China’s benchmark Shanghai Composite Index dropped 83.53 points, or 2.4 percent, to 3,344.97. The Shenzhen Composite Index for China’s smaller second exchange lost 1.9 percent to 1,122.07.

Worries have grown over whether a surge in Chinese bank lending to support the government’s massive stimulus spending may be helping foment a stock bubble. The Shanghai benchmark has risen by about 90 percent this year.

“There is concern in the market about potential tightening,” said Mark Tan, who helps manage about $15 billion of equities and bonds at UOB Asset Management in Singapore.

China’s bank regulator last week raised eyebrows when it said it would review capital adequacy as a way of cooling the lending frenzy.

Hong Kong’s Hang Seng, sensitive to developments in China, recovered from early declines to trade 50.86, or 0.2 percent, higher to 20,537.48.

Japan’s Nikkei 225 stock average rose 134.51 points, or 1.3 percent, to 10,386.10 while Australia’s benchmark gained 1.1 percent. But elsewhere, the story was mostly one of decline. South Korea’s Kospi dropped 0.4 percent, Singapore’s market was off 0.1 percent. Taiwan also slipped 0.1 percent and India’s Sensex retreated by 0.4 percent.

“China will set the tone for what’s going to happen in the rest of Asia,” Tan said.

In New York, stocks slipped on figures showing a sharper-than-expected contraction in the services sector and as investors shied from making big moves ahead of the government’s monthly reading on job losses and the unemployment rate.

Traders are growing anxious as they await the U.S. Labor Department’s employment report for July due out Friday. Unemployment stands at a 26-year high of 9.5 percent and is expected to eventually top 10 percent. Investors are looking for the pace of layoffs to slow so the economy can heal.

On Wednesday, the Dow Jones industrial average fell 39.22, or 0.4 percent, to 9,280.97. The Standard & Poor’s 500 index fell 2.93, or 0.3 percent, to 1,002.72, while the Nasdaq composite index fell 18.26, or 0.9 percent, to 1,993.05.

Stock futures pointed to losses Thursday on Wall Street with Dow futures down 21 points, or 0.2 percent, at 9.224.

Oil prices fell to near $71 a barrel in Asia as investors eyed rising U.S. crude inventories and signs of a weak economy.

Benchmark crude for September delivery was down 67 cents to $71.30 a barrel by midday Singapore time in electronic trading on the New York Mercantile Exchange. On Wednesday, the contract gained 55 cents to settle at $71.97.

In currencies the dollar rose to 95.04 yen from 94.88 yen and the euro fell to $1.4396 from $1.4398.