Asian equities plunge

Asian stocks dived Friday after discouraging US economic reports unnerved investors already worried about the stability of the 17-country euro currency union. Markets in Asia followed Wall Street, which closed lower after a report showed manufacturing slowed in the mid-Atlantic region for the first time in eight months, and was far below analyst estimates. Credit downgrades of Spanish banks also rattled investors. Japan\'s Nikkei 225 tumbled 2.9 per cent to 8,617.75 as the signs of weakness in the US, a critical export market for Japanese companies, battered some of the country\'s behemoth manufacturers. Hong Kong\'s Hang Seng slid 2.7 per cent to 18,672.89 and Australia\'s S&P/ASX 200 dropped 2.4 per cent to 4,055.90. South Korea\'s Kospi tumbled 3.1 per cent to 1,787.44. Benchmarks in Singapore, Taiwan, mainland China and New Zealand also fell. \"Most of the attention is on Europe where the big risks still lie. But the US is grinding at a 2 (per cent) sort of growth rate and while that\'s better than in Europe, things are slowing down, not speeding up,\" analysts from DBS Bank Ltd. in Singapore said in an email. \"The situation is precarious.\" The Federal Reserve Bank of Philadelphia said its index of factory activity fell to minus 5.8 from 8.5 in April. Any reading below zero indicates contraction. Measures of new orders and employment also fell in May, the bank said. That suggests manufacturers in the region are cutting jobs. Markets were further rattled after Moody\'s Investor Service downgraded 16 Spanish banks Thursday, said Jackson Wong, vice president at Tanrich Securities in Hong Kong. Moody\'s said it took the action because the banks face a rising tide of bad loans linked to Spain\'s recession, a gloomy real estate market and high unemployment. \"It\'s very hard to predict how the euro crisis will evolve. All the news is bad, so investors like to stay on the sidelines even though stocks are very attractive right now,\" Wong said. The nervousness about Spain\'s banks comes as the European financial crisis intensifies. Political turmoil in Greece has increased the likelihood that it could leave the 17-country monetary union, a move that could have ripple effects throughout Europe and the world\'s financial markets. Among individual stocks, Japanese vehicle makers were hit hard. Yamaha Motor Co. tumbled 5.2 per cent and Mitsubishi Motors Corp. was down 5.1 per cent. Toyota Motor Corp. lost 3.8 per cent. Asiana Airlines, South Korea\'s second-largest carrier, plunged 5.7 per cent after reporting that its earnings slid in the first quarter of 2012 from a year earlier, mainly due to soaring fuel prices, Yonhap News Agency said. Gold miners were among the gainers. Australia\'s Newcrest Mining rose 3.7 per cent on rising prices for the precious metal. Hong Kong-listed Zijin Mining Group Co., China\'s largest gold miner, rose 3 per cent. The Dow closed down 1.2 per cent at 12,442.49. The Standard & Poor\'s 500 index was down 1.5 per cent at 1,304.86. The Nasdaq composite index fell 2.10 per cent to 2,813.69. Benchmark oil for June delivery was down 28 cents to $92.26 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell 25 cents to settle at $92.56 in New York on Thursday. In currencies, the euro fell to $1.2658 from $1.2714 late Thursday in New York. The dollar fell to 79.25 yen from 79.28 yen.