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Poor China Service Data Sends Asian Markets Reeling

“Asian stocks dropped for the first time in six days as resource companies retreated after metals prices slid overnight and an official report showed China’s services industry expanded at a slower pace.

BHP Billiton Ltd., the world’s largest mining company, sank 3.2 percent. Tokyo Electric Power Co. led declines on the Asia-Pacific equity benchmark after the Japanese utility soared 19 percent yesterday. Suntory Beverage & Food Ltd. (2587) gained 1.5 percent on its debut in Tokyo after raising almost $4 billion in Asia’s largest public offering this year. Nikkei 225 Stock Average futures dropped as Portugal’s government bond yields surged on political infighting that threaten austerity plans.

The MSCI Asia Pacific Index lost 1.1 percent to 130.12 as of 6:11 p.m. in Hong Kong, with all 10 industry groups declining. Investors are waiting on U.S. jobs figures for signs the Federal Reserve may start tapering record stimulus as China’s economy slows and Europe’s debt crisis lingers.

“Economic growth is slowing in China and is holding the market back,” Stephen Corry, a Hong Kong-based chief investment strategist at LGT Group, a private banking and asset-management group that oversees about $107 billion, said in a phone interview. “It’s difficult to see much upside. GDP growth will struggle to meet the government’s 7.5 percent target for 2013. Valuations are rock bottom but that’s not a good enough indication to purchase.”

The benchmark MSCI Asia Pacific Index retreated 8.9 percent through yesterday from an almost five-year high on May 20. That gauge yesterday traded at 12.7 times average estimated earnings, compared with 14.6 for the Standard & Poor’s 500 Index and 12.7 times for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.

Utilities Drop….”

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