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Asian stocks slip on poor US, China data; Europe rises as investors mull economic reports

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HONG KONG - Asian stocks slumped Friday after reports showed weak U.S. consumer spending and slowing Chinese industrial profit growth, casting doubts on whether the world's two biggest economies can rebound.

European stocks were higher in early trading as investors digested a slew of economic data being released throughout the day. France's CAC 40 rose 4,458.48 while Germany's DAX advanced 0.3 per cent to 9,828.69. The FTSE 100 index of leading British companies rose 0.2 per cent to 6,750.55.

U.S. stocks were poised to open lower ahead of the release of the widely watched University of Michigan consumer confidence index for June. Dow futures eased 0.1 per cent to 16,750.00 while broader S&P 500 futures slipped 0.1 per cent to 1,946.60.

Asian stocks reacted poorly after U.S. consumer spending, which accounts for 70 per cent of economic activity, inched up in May at half the rate that economists had predicted. The poor reading disappointed investors who had been looking for stronger signs that the U.S. economy is bouncing back after shrinking 2.9 per cent in the first quarter. Many had been predicting the contraction was a blip because of a harsh winter.

"The whole world is looking for a big (U.S.) GDP rebound in the second quarter. The whole world is likely to be disappointed," economists at Singaporean bank DBS said in a research report.

Adding to the pessimism, Chinese industrial profits grew 8.9 per cent in May, the slowest rate this year, a sign that the No. 2 economy continues to struggle with an extended slowdown.

Japan's benchmark Nikkei 225 tumbled 1.4 per cent to close at 15,095.00 while South Korea's Kospi shed 0.3 per cent to end at 1,988.51.

Hong Kong's Hang Seng pulled back losses to edge up 0.1 per cent to 23,221.52 while the Shanghai Composite Index in mainland China lost 0.1 per cent to 2,036.51. Australia's S&P/ASX 200 fell 0.4 per cent to 5,445.10.

In currencies, the dollar slipped to 101.38 Japanese yen from 101.66 yen in late trading Thursday. The euro rose to $1.3616 from $1.3615.

In energy trading, the price of U.S. benchmark crude for August delivery gained 8 cents to $105.91 per barrel in electronic trading on the New York Mercantile Exchange. The contract fell 47 cents on Thursday.

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