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Weak manufacturing reports hit Asian stock markets

Youkyung Lee, AP Business Writer

A man looks at an electronic stock board of a securities firm in Tokyo, Tuesday, Feb. 4, 2014. Weakness in U.S. and Chinese manufacturing sent Asian stock markets sharply lower Tuesday. (AP Photo/Koji Sasahara)

SEOUL, South Korea (AP) -- Weakness in U.S. and Chinese manufacturing sent Asian stock markets sharply lower Tuesday.

The slide in Asian markets followed losses Monday in Europe and on Wall Street after sentiment was hurt by the weak data from the world's two biggest economies.

An official Chinese manufacturing survey showed that factory output grew at a slower rate in January compared with December. The report released on the weekend followed a HSBC survey that showed an outright contraction in manufacturing.

Some of the slowdown in manufacturing might be due to Lunar New Year holidays spanning the end of January and early February, reducing working days in both months. But analysts said there could also be an underlying slowdown at work.

"True, there are distortions related to the timing of Lunar New Year, and a pollution and corruption crackdown by Beijing, but the message is still that we are seeing slower growth," Michael Every, head of financial markets research for Asia-Pacific at Rabobank, said in a report.

The sell-off in stock markets accelerated after an equivalent U.S. survey showed an unexpected drop in January. The ISM index fell to 51.2 points from 56.5 the previous month.

Analysts say that may be due to the extreme cold weather that hit the country, but is nevertheless disappointing for an economy that hopes to be rebounding.

Japan's Nikkei 225 stock average was down 2.6 percent at 14,236.59. Toyota Motor Corp. plunged 4.5 percent and Sharp Corp. sank nearly 5 percent. South Korea's Kospi shed 1.6 percent to 1,888.77 with market heavyweight Samsung Electronics Co. falling 1.5 percent.

Hong Kong's Hang Seng tumbled 2.4 percent to 21,517.65 on its first day of trading following a 4-day weekend for Lunar New Year. Markets in China and Taiwan were closed. Australia's S&P/ASX 200 dropped 1.6 percent to 5,103.10.

The U.S. stock market finished its worst day in more than seven months Monday. The Dow Jones industrial average sank 2.1 percent and the Standard & Poor's 500 dived 2.3 percent. The Nasdaq composite closed 2.6 percent lower.

In energy markets, benchmark U.S. crude for March delivery was up 15 cents at $96.58 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell $1.06 to close at $96.43 on Monday.

The euro fell to $1.3513 from $1.3523 late Monday. The dollar rose to 101.19 yen from 101.14 yen.