Asia stocks volatile after mixed US economic data

BANGKOK -- Asian stocks were volatile Friday as the boost from Europe's move to contain its debt crisis faded and mixed US economic data reinforced pessimism about recovery prospects.

Benchmark oil rose above $82 a barrel while the dollar gained against the euro but fell against the yen.

Japan's Nikkei 225 swung between gains and losses before drifting 0.2 percent higher at 8,722.25. South Korea's Kospi also was in and out of positive territory, rising 0.3 percent by midafternoon to 1,773.83. Benchmarks in Indonesia, Taiwan, Malaysia and the Philippines gained.

Australia's S&P/ASX 200 lost less than 0.1 percent to 4,005.80, while shares in Hong Kong, Shanghai and Shenzhen sank after data showed that a slowdown in exports and rising prices in China caused its manufacturing sector to stagnate in September.

Hong Kong's Hang Seng fell 1.4 percent to 17,753.05. On the mainland, the Shanghai Composite Index fell 0.7 percent to 2,350.27 while the smaller Shenzhen Composite Index lost 0.6 percent to 1,000.35.

On Thursday, buoyant investors plunged into stocks after German lawmakers approved new powers to fortify a fund implemented to help countries that use the euro common currency to deal with heavy debt loads. But passage was expected and the boost to sentiment short-lived.

"The bottom line is that there is still a huge degree of (skepticism) on the ability of policymakers to resolve the crisis in the eurozone periphery while growth worries have not receded," Credit Agricole CIB said in a research note.

"It may be difficult to turn sentiment around as we go into the final quarter of the year, especially as those investors registering profits for the year may want to capitalize on these profits rather than sit through continued volatility in the weeks ahead."

In Tokyo, Japanese auto parts company Furukawa Electric Co. tumbled 5.3 percent, a day after agreeing to plead guilty to price-fixing in the U.S.

Blue chip property shares in Hong Kong were sharply lower amid fears of a downturn following steps by the government to cool off its red-hot real estate sector. China Overseas Land & Investment plunged 5.8 percent and China Resources Land tumbled 5.2 percent.

Banking shares were also lower. Hong Kong listed Agricultural Bank of China, the country's largest rural lender, plummeted 8.5 percent. China Construction Bank Corp. fell 4.9 percent. Australia's Westpac Banking Corp. dropped 1.2 percent, and Japan's Mitsubishi UFJ Financial Group was 0.9 percent down.

In New York on Thursday, the Dow Jones industrial average ended higher after data showed first-time applications for unemployment benefits fell to a five-month low. The U.S. government also raised its estimate of economic growth in the April-June period.

But other economic reports were weak. A trade group reported that chief executives of the nation's largest companies are more pessimistic than they were just three months ago. Also, fewer Americans signed contracts to buy homes in August, the second straight month of declines.

The Dow Jones industrial average rose 1.3 percent to close at 11,153.98 after a day of big swings. The Standard & Poor's 500 index rose 0.8 percent to 1,160.40. The Nasdaq composite index lost 0.4 percent to 2,480.76.

In Europe on Thursday, stocks surged after Germany passed a measure to expand the powers of a regional bailout fund.

The measure, which must be approved by all 17 countries that use the euro, will allow the bailout fund to buy government debt and lend money to troubled European countries. Finland approved the measure Wednesday.

Oil gained following the news out of the US and Europe. Benchmark oil for November delivery was up 56 cents to $82.70 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose 93 cents to finish at $82.14 per barrel on the Nymex on Thursday.

In currency trading, the euro slipped to $1.3554 from $1.3591 late Thursday in New York. The dollar weakened to 76.56 yen from 76.79 yen. (AP)