Asian markets sag amid economic jitters

HONG KONG — Asian stocks continued to sag Friday as investors failed to get inspiration from U.S. corporate earnings and signs of deflation emerged in Japan.

The back-and-forth trade wrapped up a lackluster week that saw the region’s major benchmarks pull back amid concerns the recent rally had overestimated the speed and scale of any recovery in global growth. Tokyo’s market extended its losing streak to eight straight days, while oil prices fell below $60 a barrel.

Investors were less than encouraged by the tepid gains on Wall Street, where stocks inched higher following aluminum maker Alcoa Inc’s narrower-than-expected second quarter loss. Weak sales reports from U.S. retailers and more pain in the country’s labor market did little to lift the mood.

The markets cratered after last week’s troubling signs of growing job losses in the U.S. and Europe led investors to reassess the recovery story that drove markets higher between March and June.

Now, analysts say there seems to be a lack of direction — evidenced by low volumes and volatility — as many investors await more guidance or take a break during the summer months.

“I think after the massive rally it’s only natural that markets are consolidating now,” said Khiem Do, a Hong Kong-based fund manager who helps oversee more than $8 billion in Asian equities at Baring Asset Management. “I think the surprise is that the correction has not been more severe.”

Markets in Asia gyrated throughout the day before edging down in the afternoon.

In Tokyo, the Nikkei closed off slightly, losing 3.78 points, or 0.04 percent, to 9,287.28. The benchmark last ended higher on Tuesday, June 30.

The weak trading in Japan came as its central bank said wholesale prices fell 6.6 percent in June from a year earlier — the biggest fall on record and the latest evidence that deflation is returning to the world’s second-biggest economy.

Elsewhere, Hong Kong’s Hang Seng fell 111.78, or 0.6 percent, to 17,7688.11. South Korea’s Kospi fell 0.2 percent and Shanghai’s index shed 0.3 percent.

Meanwhile, Australia’s index gained 0.8 percent and Singapore’s market fell 0.1 percent.

In New York Thursday, the Dow Jones industrial average rose 4.76, or 0.1 percent, to 8,183.17, the second day of modest gains after a 161-point drop on Tuesday. The blue chips crossed zero 108 times during trading.

The broader Standard & Poor’s 500 index rose 3.12, or 0.4 percent, to 882.68.

U.S. stock futures were lower suggesting more losses Friday on Wall Street. Dow futures were down 30, or 0.4 percent, at 8,104 and S&P futures fell 3.6, or 0.4 percent, to 875.30.

Oil prices were down in Asia, with benchmark crude for August delivery falling 78 cents to $59.63 a barrel. The contract rose 27 cents Thursday.

The dollar dropped to 92.60 yen compared to 93.02 yen. The euro tanked to $1.3904 from $1.4018.