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Asia shares drop on China factory output

shares drop

Shares dropped 1.9% in Tokyo to 38,070.40, the Kospi slipped 0.5% to 2,744.63, S&P/ASX 200 declined 0.2% to 7,712.90, while the Shanghai Composite index lost 0.6% to 3,015.95

Shares were mixed in Asia on Monday after China reported its factory output slowed in May, with the property market still deep in the doldrums.

U.S. futures edged lower and oil prices dropped.

Shares dropped 1.9% in Tokyo to 38,070.40 and in Seoul, the Kospi slipped 0.5% to 2,744.63. Australia’s S&P/ASX 200 declined 0.2% to 7,712.90.

Hong Kong’s Hang Seng added 0.1% to 17,960.09, while the Shanghai Composite index lost 0.6% to 3,015.95.

Factory output declined 5.6% in China in May, the government reported, below analysts’ forecasts and slowing from 6.7% the month before. Retail sales increased just 4.1% in the first five months of the year.

Overshadowing those lacklustre numbers, property investments dropped 10% in May from a year earlier, while home prices in major cities dropped 3.2%.

Property sales slumped 30.5% year-on-year, in further evidence that a raft of measures to try to turn around a slump in the property sector have yet to take hold.

Most markets in Southeast Asia were shut for holidays, while Thailand’s SET shed 1.2%.

On Friday, U.S. stocks were near their record levels, with the S&P 500 down less than 0.1%, to 5,431.60, the first time last week that it did not set an all-time high.

The DJIA slipped 0.1%, to 38,589.16, and the Nasdaq composite gained 0.1% to its record set a day before on the back of gains for technology stocks, ending at 17,688.88.

In Europe, stocks dipped after elections that have raised uncertainty over the region’s future.

Wins by far-right parties have raised pressure on France’s president in particular, and investors worry it could weaken the EU, stall fiscal plans and ultimately hurt France’s ability to pay its debt. Recent elections have also shaken markets in Mexico, India and elsewhere.

France’s CAC 40 dropped 2.7% to bring its loss for the week to 6.2%, its worst in over two years. Germany’s DAX shed 1.4%.

U.S. stocks have set records as hopes rise that inflation is slowing enough to convince the Fed to reduce interest rates later this year. Big technology stocks, meanwhile, continue to rise almost regardless of what the economy and interest rates are doing.

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