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Market Update

Asia Slumps on Fed Comments, China PMI

Asian stocks fell Thursday after downbeat Chinese preliminary factory data and comments by Fed Reserve chairman Ben Bernanke hit investor confidence.

The U.S. Federal Reserve concluded its two-day monetary policy review yesterday. Chairman Bernanke said in a press conference that the Fed would start rolling back its bond-purchase program later in the year if the economy continues to show improvement.

Back in Asia, concerns about China's flagging industrial growth further soured sentiment. The preliminary reading of HSBC purchasing manager's index came in at at a nine-month low of 48.3 in June, down from the final print of 49.2 in May. A reading below 50 indicates contraction in the economy and vice-versa.

Amid these worries, mainland China's Shanghai Composite lost 2.8% while Hong Kong's Hang Seng fell 2.9%.

Australia's S&P/ASX All Ordinaries dropped 2% while Mumbai's Sensex erased 2.7%. Japan's Nikkei closed 1.7% lower.

Stocks on the Move

Resources stocks were broadly lower across the region as commodities underwent downward pressure on heels of disappointing Chinese industrial activity data. China is a major producer as well as consumer of commodities, and any change in its economic growth directly affects the commodities market.

Australian miners were particularly hit in today's trade, China being the country's top export destination. Fortescue Metals Group plunged 6.6%, Rio Tinto slumped 3.3% while index heavyweight BHP Billiton tumbled 2.6%.

Oil firms Santos Ltd. and Woodside Petroleum drifted around 1.5% lower each.

In Hong Kong, Zijin Mining Group fell 2.3%, Aluminum Corp. of China tumbled 3.5% while oil explorer CNOOC plummetted 4.3% and PetroChina dropped 3.8%.

In Japan, which is another major trading partner of China, barring a couple of exporters and financial stocks, almost all sectors dipped into the red.

Oil giant Inpex Corp. tripped 3.7% while Japan Petroleum eased 1.5%.

Sumitomo Metal Mining Co. plunged over 5% while Mitsubishi Materials lost around a percent.

Realty players, particularly, posted sharp losses. Sumitomo Realty & Development Co. lost 4.9% and Mitsui Fudosan Co. retreated 3.8%.

Property developers in Hong Kong, too, scored heavy losses. China Resources Land Ltd. pulled back 6.8%, New World Development fell 3.6% while Sino Land Company pushed down over 4%.

Major losers in Mumbai included metal firms, banks and auto stocks as investors scrambled out of equities, following the global sell-off. The Indian currency, meanwhile, plunged to a fresh low of 59.93 per dollar in the wake of Fed's comments.

Jindal Steel was the top loser on the 30-share benchmark index, down 9.6%, followed by Tata Steel (-6.3%), Hindalco Industries (-6.2%) and HDFC Bank (-4.3%).

Among auto firms, Mahindra & Mahindra backtracked 3.9%, Maruti Suzuki reversed 1.2% while Tata Motors skidded 1.1%.