Weak US manufacturing data hurt market confidence in Asia and sent key indices in Tokyo and Hong Kong sharply lower.

The latest survey of US manufacturing activity showed a contraction for the third consecutive month in August. Concern about economic weakness in the US sent commodities tumbling. Shares of JX Holdings tanked nearly 4% while Japan Petroleum Exploration declined 3%. Crude oil prices fell below $96 a barrel in US trading overnight.

In Australia, second-quarter gross domestic product slowed in the last quarter, official figures showed today. The report from the Bureau of Statistics in Sydney showed weaker than expected growth of 0.6% from the previous three months.

Toys and clothes supplier Li & Fung declined 2.5% in Hong Kong on fears of slower export demand.

The benchmark Nikkei 225 index closed down 95 points at 8,679 in Japan. The Hang Seng retreated 286 points at 19,143 in Hong Kong.

There was also trepidation ahead of the European Central Bank meeting this Thursday and widely watched US employment data out Friday. Markets are hopeful that the ECB will shed some light on how it will tackle the European debt crisis.

Japanese exporters were pressured following the weak US factory report. Shares of Nissan Motor swerved 1.4% off course while Honda Motor lost 0.5% on jitters about slowing demand from the world's biggest economy.

Fears about slowing exporters dried up demand for Sony which plunged 3% and Renesas Electronics which dropped 3.7%. Panasonic fell 2.3%.

Chinese personal computer maker Lenovo Group tumbled 7% in Hong Kong after a report that Japan's NEC is to offload its 2.7% holding in the firm. Shares of NEC surrendered 2.6% in Tokyo.

In separate data the HSBC China service sector purchasing managers' index for August fell to 52 points after the previous month's reading of 53.1.



CJ

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