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Market Update

Asian Stocks Drop on China, U.S. Cues

Asian markets were trading weak Wednesday, weighed down by overnight losses at Wall Street and disappointing Chinese services sector data.

At the time of writing, the Shanghai Composite dropped 1.3%, the Hang Seng lost 1.9% and the Sensex erased 1%. Australia's S&P/ASX All Ordinaries fell 1.9% while Japan's Nikkei was trading flat.

Investor confidence was weak at open after U.S. stocks finished Tuesday's session with losses overnight. But stocks pushed further into the negative zone after official data released in China showed growth in the country's service sector was slower than the previous month.

The official reading of purchasing managers' index of China's service sector slipped to 53.9 in June down from a high of 54.3 in May.

Other reports released today included Japan's composite output index, which fell to 52.3 in June from 54.1 in May.

Meanwhile, official statistics in Australia indicated that retail sales in the country increased a less-than-expected 0.1% in June, after posting a decline of 0.1% in May.

Stocks on the Move

Defensives such as realty players and pharma stocks found some support in Tokyo. Some car manufacturers and metal-linked firms were also in the green, but other sectors slipped into negative territory.

On the gainers' side, Mitsui Fudosan rose 1.5%, Inpex Corp. gained 2.7% while Nissan Motors enhanced 1.4%. Drug makers Astellas Pharma and Takeda Pharmaceuticals were up around 0.5% each.

On the flipside, top losers included power utilities. Tokyo Electric Power slumped 8.3%, Kansai Electric Power fell 2.9% and Kyushu Electric Power dropped 3.6%.

Suntory Beverage & Food Ltd. made its debut on the Tokyo stock index today but received a mixed response from investors. Shares of the company opened 0.6% above its premarket price.

Softbank Corp. lost 1.9% even as the company's bid for U.S. based mobile carrier Sprint Nextel Corp. reportedly received from a majority of Federal Communications Commission members.

In Hong Kong, property developers, resources stocks and banks posted heavy losses.

China Resources Land Ltd. plunged 4.7%, New World Development Corp. slumped 4.3% while Sino Land Company dropped 3.9%.

On the mainland, Gemdale Corp. and Poly Real Estate slumped over 4% while the broader-Shenzhen listed pulled back 4.5%.

Metal-linked firms Jiangxi Copper and Aluminum Corp. of China were trading down 2.6% to 3.5% while banks including ICBC, Agricultural Bank of China, China Construction Bank and Bank of Communications erased around 2% to 2.5% each.

In Mumbai, investors took cues from overseas markets and moved out of equities even as the rupee weakened further against the dollar.

Metal-players were among the top decliners. Tata Steel fell 4.2%, Hindalco Industries retreated 3.7% and Sterlite Industries pulled back 3.5%.

Among banks, state-run SBI dropped 2.9% while private lenders ICICI Bank and HDFC Bank lost 1.8% and 1.4% respectively.

Banks in Sydney were listless too. NAB erased 1.8% while Westpac Banking Corp. fell 2.6%. Commonwealth Bank slipped 0.8%.

Mining companies were trading with sharp losses amid lingering concerns of economic growth in China, the country's largest export destination for metals.

Index leader BHP Billiton and its close competitor Rio Tinto plunged 3.6% each while Fortescue Metals Group retreated 2.4%.

Retailers also slipped after retail sales posted weaker than expected growth. Wesfarmers Ltd. fell 2.4% and Woolworths Ltd. lost over 2%.