HONG KONG, Nov 08, 2013 (AFP) Asian markets sank on Friday, following losses on Wall Street, after better-than-expected US growth data fed speculation the Federal Reserve will roll back its stimulus programme soon.
The euro was flat after another sell-off late Thursday in response to the European Central Bank's surprise decision to cut eurozone interest rates and a warning that the bloc could be in for a long period of weak inflation.
Tokyo fell 0.87 percent by the break, Hong Kong slipped 0.56 percent, Sydney eased 0.41 percent and Seoul lost 0.37 percent while Shanghai eased 0.30 percent.
The Commerce Department said the US economy grew at an annual rate of 2.8 percent in July-September well above the 1.9 percent projected by analysts and representing the strongest pace in a year.
And while economists said the headline number masked weakness in consumer spending and other areas, David Levy, portfolio manager at Kenjol Capital Management, said nevertheless "the market is looking at it as a strong number".
Despite the upbeat figures indicating the US recovery is gaining traction, investors are moving out of assets as they expect it will bring forward a wind down of the Fed's bond-buying scheme that has provided them cheap money.
The monetary easing unveiled in September 2012 has been credited with fuelling a global stocks rally.
The central bank has said it will start to cut down its $85 billion a month programme when the economy shows it is strong enough and unemployment has fallen enough.
Thursday's news brings Friday non-farm payrolls even more sharply into focus.
While many market-watchers had expected the Fed to begin tapering early next year, Levy said many will now be wondering if the growth data "pushes up the timetable".
On Wall Street shares fell despite a blockbuster 73 percent surge for Twitter on its markets debut. The Dow lost 0.97 percent and the S&P 500 gave up 1.32 percent -- both indexes have been sitting at record highs in the past week. The Nasdaq sank 1.90 percent.
In New York forex trade the dollar also tumbled against the yen after the growth figures, ending at 98.02 yen, well down from 98.60 yen in Asia earlier in the day. On Friday in Tokyo the greenback edged up slightly to 98.22 yen.
However, the euro continued to struggle after the ECB slashed its key interest rate by a quarter point to 0.25 percent as it seeks to fend off falling inflation, which hit a four-year low in October.
The announcement came as a surprise to financial markets, which had mostly been betting on a cut at the end of the year or early 2014.
Adding to investor worries was a warning from ECB president Mario Draghi that the 17 countries that share the euro "may experience a prolonged period of low inflation", which could have a severe impact on debt-addled economies.
The euro was quoted at $1.3410, compared with $1.3414, while it also fetched 131.74 yen from 131.50 yen. However, the single currency is still well down from the $1.3518 and 133.36 yen in Tokyo earlier on Thursday.
On oil markets New York's main contract West Texas Intermediate (WTI) for December delivery was up 27 cents to $94.47 in morning Asian trade, while Brent North Sea crude for December eased 12 cents to $103.34.
Gold was at $1,307.56 per ounce at 0220 GMT compared with $1,315.80 on Thursday.
