Asia markets sink after US losses, eyes on Fed meeting

Asian markets mostly retreated Monday following a fourth successive sell-off in New York, while investors await the US Federal Reserve's next policy meeting looking for a handle on its plans for interest rates.

The dollar also remained weak after a disappointing read on the US housing market, while oil was also under pressure owing to a global supply glut.

Tokyo fell 0.95 percent, or 194.43 points, to 20,350.10, Seoul gave up 0.35 percent, or 7.15 points, to 2,038.81 and in late trade Hong Kong shed 2.57 percent and Shanghai was 3.20 percent lower.

However, Sydney ended higher, adding 0.43 percent on gains by retailers.

Investors took a lead from their US counterparts, who continued to cash out on Friday as data showing sales of new single-family homes fell in June and May sales were much lower than previously reported.

The news, which followed a downbeat Chinese manufacturing report, trumped forecast-busting earnings from online retailer Amazon.

The Dow fell 0.92 percent, the S&P 500 dropped 1.07 percent and the Nasdaq sank 1.12 percent.

"Share markets are likely to remain volatile as we are still going through a seasonally weak period of the year for shares," Shane Oliver, Sydney-based global strategist at AMP Capital Investors Ltd., told Bloomberg News.

"Uncertainties remain regarding Chinese economic growth and a likely Fed interest rate hike lies ahead for later this year."

The focus is now on the Fed's policy meeting this week. While it is not expected to raise rates, dealers are hoping for some forward guidance, with most analysts tipping a hike in either September or December.

Chinese markets suffered a second straight day of selling on increasing fears about the state of the mainland economy after a gauge of manufacturing activity fell in July to its lowest level in 15 months.

And on Monday figures showed profits at the country's industrial firms slipped 0.3 percent year-on-year in June.

"The soft industrial figure number is adding downward pressure," said Gerry Alfonso, a sales trader at Shenwan Hongyuan Group Co. in Shanghai.

The Shanghai index lost 1.29 percent Friday in reaction to the poor manufacturing report and also on profit-taking from a six-day rally. The market has been recovering over the past three weeks after a month-long sell-off was only halted by strict government trading measures on July 8.

In foreign exchanges the dollar was at 123.48 yen Monday, down from 123.81 yen in New York and well off the levels above 124 yen earlier Friday in Asia.

The euro changed hands at $1.1008 and 135.93 yen against $1.0977 and 135.89 yen in US trade.

Oil resumed its downtrend as demand weakens in the face of a slowing Chinese economy, weakness in Europe, oversupply and expectations of a flood of Iranian crude onto world markets.

US benchmark West Texas Intermediate for September delivery fell 26 cents to $47.88 and Brent crude for September was down 10 cents to $54.52 a barrel.

The weak US data lifted gold as it pushed back expectations for an early US rate rise.

Gold fetched $1,099.92 an ounce compared with $1,080.17 late Friday.

The precious metal has taken a hit in recent weeks as investors pull out of the safe haven looking for better returns elsewhere.

In other markets:

-- Taipei ended 2.41 percent, or 211.18 points, lower at 8,556.68.

Taiwan Semiconductor Manufacturing Co closed 2.19 percent lower at Tw$134.0 while Formosa Plastics Corp was off 1.55 percent at Tw$69.9.

-- Wellington shed 0.38 percent, or 22.12 points, to 5,872.06.

Air New Zealand was down 0.56 percent at NZ$2.64 and Fletcher Building slipped 1.86 percent to NZ$7.90.

dan/psr