BANGKOK (AP) - Signs that the U.S. economy may be struggling dampened investor sentiment in Asia on Thursday as concerns about inflation continued to hang over the region.
Oil prices fell below $109 a barrel, extending a weeklong sell-off on investor concern that slowing U.S. economic growth will undermine demand for crude. In currencies, the dollar was lower against the euro and the yen.
Hong Kong's Hang Seng index dropped 0.1 percent to 23,287.67. On mainland China, the Shanghai Composite Index lost 0.2 percent to 2,861.09, while the smaller Shenzhen Composite Index rose 0.1 percent to 1,186.70. Australia's S&P/ASX 200 rose 0.1 percent to 4,744.50.
Benchmarks in Singapore, Malaysia and Indonesia fell, while those in New Zealand and Taiwan rose. Markets in South Korea and Japan were closed for holidays.
Investors weighed trades cautiously as analysts warned that inflation remained a major drag on the region despite various actions by central banks in China, India, South Korea and elsewhere to cool rising prices by raising interest rates and taking other steps to reduce the amount of money sloshing around their economies.
On Tuesday, China's central bank said its top priorities were stabilizing consumer prices and managing inflation expectations. The same day, India's central bank raised its key interest rate, its ninth hike in just over a year, and warned that persistent inflation is threatening growth in Asia's third-largest economy.
"Inflation has been picking up across most Asian economies, and quite rapidly in some places. We expect higher inflation still in the coming months," said a research note by Credit Agricole CIB in Hong Kong. It said that the Indian central bank's high inflation forecast "points to more decisive tightening ahead."
But in the U.S., unemployment was the focus of concern.
On Wall Street on Wednesday, stocks fell after payroll processor ADP said companies added 179,000 new jobs in April - far fewer than economists had expected. That raised worries about what the government's monthly jobs report for April will reveal when it is released Friday.
In a separate report, the Institute for Supply Management said its service sector index rose at the slowest pace in 8 months in April, as many companies express concerns about higher food and gas prices.
The U.S. service industry employs about 90 percent of the U.S. work force, so signs of a slowdown in the service sector index have implications for the overall economy.
Benchmark crude for June delivery was down 27 cents to $108.95 per barrel in electronic trading on the New York Mercantile Exchange on Thursday. The contract lost $1.81 to settle at $109.24 per barrel on Wednesday.
Signs that the U.S. economic recovery is slowing dragged down oil prices, which hurts the energy companies whose fortunes depend on them. Hong Kong-listed shares of PetroChina, China's biggest oil and gas company, lost 2.2 percent while China Petroleum & Chemical Corp., Asia's biggest refiner, slipped 1.1 percent.
But shares in airlines, which benefit from lower oil prices, were up. China Eastern Airlines Corp. Ltd. rose 2.4 percent; China Southern Airlines Co. Ltd. was 2 percent higher. Taiwan's EVA Airways Corp. was 0.7 percent higher.
Shares of Hong Kong-listed Zijin Mining Group, China's biggest gold miner, dropped 1.7 percent, a day after a court in southeastern China ordered the company to pay a $4.6 million fine for toxic mine spills at the Zijinshan Gold and Copper Mine nearly a year ago.
The Dow Jones industrial average fell 0.7 percent to close at 12,723.58. The Standard & Poor's 500 index fell or 0.7 percent to 1,347.32. The Nasdaq composite index fell 0.5 percent to 2,828.23.
In currencies, the euro rose to $1.4858 from $1.4849 late Wednesday in New York. Earlier Wednesday the dollar fell to $1.4942 - its lowest point since December 2009. The dollar weakened to 80.38 yen from 80.58 yen.