Asian markets mixed after Wall Street hit with downbeat news about economy

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Asian stock markets were mixed Thursday after fresh evidence of slower U.S. growth blunted appetite for riskier assets like stocks. European shares were higher.

The latest sign of sluggishness in the world's No. 1 economy came from the Federal Reserve's regional survey, a report known as the ``beige book.'' The Fed said economic growth in the U.S. has been steady during the summer in some cities, but was slowing in others like Atlanta and Chicago.

The survey followed a U.S. Commerce Department report that showed durable goods orders fell 1 per cent in June. Economists expected a 1 per cent gain.

But some analysts believe it is overly pessimistic to predict that the U.S. will slip back into recession.

``We don't believe in a double-dip recession in the U.S.,'' said Stephen Corry, Asia Pacific chief investment officer for Merrill Lynch Wealth Management. ``The global economy will continue to muddle though and that's not a bad backdrop for global equities.''

In early trading in Europe, Britain's FTSE 100 rose 0.7 per cent, Germany's DAX index gained 0.6 per cent, and France's CAC-40 rose 0.5 per cent.

Japan's Nikkei 225 stock average fell 0.6 per cent to 9,6996.02 as investors locked in profits following a 2.7 per cent jump the previous day.

South Korea's Kospi eased 0.2 per cent to 1,770.88 while Hong Kong's Hang Seng index was steady at 21,093.82. Australia's S&P/ASX 200 dropped 0.1 per cent to 4,524.1 on weakness in banks.

Benchmarks in China, Taiwan, Indonesia, India and Singapore rose.

Asian equities are trading at a 10 per cent premium to global stocks on a price-to-book value basis, according to Corry. ``We're long-term bullish on Asian equities, but valuations probably don't justify purchasing them right now,'' he said.

In New York Wednesday, the Dow Jones industrial average finished down 0.4 per cent at 10,497.88.The broader Standard & Poor's 500 index fell 0.7 per cent to 1,106.13, while the Nasdaq composite index fell 1 per cent to 2,264.56.

In currencies, the dollar fell to 87.20 yen from 87.44 yen late Wednesday in New York. The euro rose to $1.3070 from $1.2996.

Benchmark crude for September delivery was up 25 cents at $77.24 a barrel in electronic trading on the New York Mercantile Exchange. The contract dropped 51 cents to settle at $76.99 on Thursday.

For today's market data, click here.