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Japanese stocks down after growth disappoints

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First Posted: 8/12/2013

(AP) Slower-than-expected economic growth weighed on Japan’s stock market Monday but gains were posted elsewhere in Asia following signs that China’s economy may be picking up.


The Nikkei 225 index fell after the Cabinet Office reported Japan’s economy grew 2.6 percent in the April-June quarter, far short of the 3.6 percent growth that some analysts had expected. The Tokyo benchmark fell 0.8 percent to 13,507.09.


The results will make it more problematic for Prime Minister Shinzo Abe to carry out plans to raise sales tax by 3 percentage points in April to improve public finances. The tax is now 5 percent.


Abe has “already given an official instruction to economic ministers to check and discuss the impact of the consumption tax hikes on the economy, before making a final decision sometime before mid-October,” said Kazuhiko Ogata of Credit Agricole CIB in a market commentary.


A possible upswing in China’s economy helped boost stocks in Hong Kong and elsewhere. Data released Friday showed a 9.7 percent rise in China’s industrial production for July. Some other indicators such as auto sales also showed improvement.


Analysts said the figures added weight to the argument that the recent soft patch in the world’s second-largest economy may have come to an end.


Hong Kong’s Hang Seng rose 1.7 percent to 22,171.49. South Korea’s Kospi advanced 0.3 percent to 1,885.81.


Benchmarks in the Philippines, Singapore, Taiwan and mainland China also rose. New Zealand and Indonesia fell.


Australia’s S&P/ASX 200 rose 0.7 percent to 5,091.60. Resource and mining stocks got a big boost from signs of better growth in China, the world’s biggest importer of raw materials.


“Our market had limited opportunity to react to the better-than-anticipated industrial production figure released from China on Friday,” said Ric Spooner, chief market analyst at CMC Markets in Sydney. “I think we’re seeing some delayed reaction to that.”


Newcrest Mining, Australia’s largest gold miner, jumped 7.2 percent. OZ Minerals advanced 4.3 percent. Fortescue Metals leapt 6.5 percent.


All three major Wall Street indexes ended lower Friday. The Dow fell 0.5 percent to 15,425.51. The Standard & Poor’s 500 fell 0.4 percent to 1,691.42. The Nasdaq composite fell 0.3 percent to 3,660.11.


Benchmark oil for September delivery was up 11 cents to $106.06 a barrel in electronic trading on the New York Mercantile Exchange. The contract gained $2.57, or 2.5 percent, to close at $105.97 per barrel on the New York Mercantile Exchange.


In currencies, the euro fell to $1.3324 from $1.3357 late Friday. The dollar rose to 96.46 yen from 96.19 yen.


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Follow Pamela Sampson on Twitter at http://twitter.com/pamelasampson


Associated Press

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