Global stocks fall after China factory weakness

BEIJING - Global stocks fell further Friday after unexpectedly weak Chinese manufacturing data fueled concern about global growth.

The preliminary version of the Caixin purchasing managers' index, a gauge of economic demand in China, fell to an unexpectedly low 47.1 points from July's 47.8 points on a 100-point scale on which numbers below 50 show a contraction. The orders, exports and employment components of the index all declined.

That added to concern about the outlook for China's cooling economy that has caused stocks to plummet this week despite a massive government intervention. Abroad, last week's surprise devaluation of China's yuan has sent shockwaves through other emerging countries that might face tougher competition from lower-priced Chinese exports.

The Shanghai Composite Index suffered another steep drop of 4.3 percent to 3,507.74 points and Toyko's Nikkei 225 was off 2.9 percent at 19,435.83. Seoul's Kospi shed 2 percent to 1,876.07 and Hong Kong's Hang Seng retreated 1.5 percent to 22,409.62. Sydney's S&P ASX 200 lost 1.4 percent and India's Sensex was down 1.2 percent at 27,276.59.

European stocks are slipped, while U.S. stock futures pointed to a subdued opening. In early trading, France's CAC-40 declined 0.6 percent to 4,752.29 points and Germany's DAX was off 0.5 percent at 10,374.54. On Thursday, both lost 1.3 percent and Britain's FTSE was off 0.6 percent. Wall Street was mixed, with futures for the Dow Jones industrial average down 0.1 percent and the Standard & Poor's 500 index up by a similar margin.

"Global markets are in panic mode as the full scale of China's slowdown becomes clearer and the market pricing for a Fed September rate hike is unwound. Asian markets are a sea of red," said Angus Nicholson of IG Markets in a report. "The phenomenal six-year bull market may finally meet its match in China-induced global deflation."

Selling on Thursday outweighed buying by a ratio of more than eight to one in heavy trading. Strategists and traders, noting the lack of major U.S. economic news, said the drop in stocks was also likely tied to computerized selling after the S&P 500 moved below one of its most closely watched indicators, a 200-day moving average. While many investors buy and sell stocks based on a company's business outlook, there is a different class of traders who rely on such technical indicators to make investment decisions.

Benchmark U.S. crude fell 26 cents to $41.06 per barrel in electronic trading on the New York Mercantile Exchange. The contract gained 5 cents on Thursday to close at $41.32. Brent crude, used to price international oils, shed 20 cents to $46.40 in London after losing 54 cents the previous day to close at $46.62.

The dollar sank to 122.9290 yen from Thursday's 123.4500 yen. The euro edged up to $1.1247 from the previous day's $1.1236.