Most Asian markets turn lower after US retreat

HONG KONG: Asian markets got off to a subdued start in June after an uninspiring report on the economy from the Federal Reserve left Wall Street in the red.

After a positive opening, most major indexes retreated, with Shanghai and Hong Kong weighed by a below-par reading on factory activity, while the pound was hit by growing uncertainty over next week's British election.

US stocks turned lower after the Fed said in its "beige book" that while sentiment among US firms was broadly upbeat, there were worries in some regions about trade and other government policies.

However, it did not provide any suggestion that the central bank would hold off lifting interest rates as expected later this month, providing support to the dollar.

While global markets ended May near record highs, there are nagging concerns that crises engulfing President Donald Trump could throw off course his economy-boosting agenda, which was a key driver of an equities rally since his November election win.

All three main equity markets ended down on Wednesday and Asian traders mostly followed suit.

Sydney slipped 0.1 percent and Seoul was 0.2 percent off.

Hong Kong gave up 0.1 percent and Shanghai shed 0.5 percent following the release of the private Caixin purchasing managers index of manufacturing showed activity contracted in May for the first time in 11 months.

"China's manufacturing sector has come under greater pressure in May and the economy is clearly on a downward trajectory," Caixin analyst Zhengsheng Zhong said in a joint statement with data compiler IHS Markit.

The result disappointed dealers, a day after an official reading from Beijing pointed to a continued increase, beating forecasts.

However, Tokyo ended the morning session one percent higher thanks to the pick-up in the dollar, which helps Japan's exporters.

On currency markets the pound stumbled after a fresh opinion poll pointed to a hung parliament at next Thursday's British general election.

Sterling had risen in recent weeks on the prospect that Prime Minister Theresa May would win a landslide, giving her a stronger hand in Brexit talks. But the currency has fallen with the government's poll numbers on fears Britain could end up with a bad exit deal.

- Key figures around 0230 GMT -

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Tokyo - Nikkei 225: 1.0 percent at 19,854.27 (break)

Hong Kong - Hang Seng: DOWN 0.1 percent at 25,644.72

Shanghai - Composite: DOWN 0.5 percent at 3,103.11

Euro/dollar: DOWN at $1.1238 from $1.1241 at 2100 GMT

Dollar/yen: UP at 111.04 yen from 110.75 yen

Pound/dollar: DOWN at $1.2880 from $1.2892

Oil - West Texas Intermediate: UP 41 cents at $48.73 per barrel

Oil - Brent North Sea: UP 37 cents at $51.13

New York - Dow: DOWN 0.1 percent at 21,008.65 (close)

London - FTSE 100: DOWN 0.1 percent at 7,519.95 (close)