Asian stocks closed mostly lower on Friday, with weak commodity prices, tepid U.S. data and worries about the upcoming referendum in Greece weighing on the markets. Disappointing U.S. jobs data tempered expectations for a September interest-rate hike from the Federal Reserve, offering some respite over potential capital flow reversals.
Chinese stocks plunged once again, with banks and property developers bearing the brunt of the selling, after the China Securities Regulatory Commission said it has launched investigations into suspected illegal manipulation across markets.
The benchmark Shanghai Composite index fell 225.85 points or 5.77 percent to 3,686.92, dropping nearly 30 percent since its June peak and erasing most of this year's gains. At one point, the benchmark index fell 7.2 percent. Hong Kong's Hang Seng index fell 218.21 points or 0.83 percent to 26,064.11 amid the sell-off in mainland stocks.
China's central bank governor has reiterated that the country will continue to implement a prudent monetary policy to guard against systematic financial risks. Comments from Premier Li Keqiang that the government will introduce more targeted economic policies to stabilize the country's capital and currency markets also failed to calm investors' nerves.
On the economic front, activity in China's services sector slowed sharply last month, a private survey showed, signaling a further loss of growth momentum in the economy at the end of second quarter. The HSBC-Markit purchasing managers index (PMI) fell to a 5-month low of 51.8 from 53.5 in May. The composite index, which covers both manufacturing and services, came in at 50.6, down from 51.2 in the previous month and touching a 13-month low.
Japanese shares pared initial losses to end largely unchanged. The benchmark Nikkei average closed up 17.29 points or 0.08 percent at 20,539.79, while the broader Topix index of all first-section shares gained 0.23 percent to finish at 1,652.09. Among the prominent gainers, Advantest, Bridgestone, Fanuc, Fujifilm Holdings, Japan Tobacco, Kyocera, Mazda Motor, Nissan Motor and Nomura Holdings rose 1-3 percent.
Mizuho Financial Group and Sumitomo Mitsui Financial Group both climbed over 2 percent on reports they plan to bolster their balance sheets by selling Tier I bonds. Mitsubishi UFJ Financial, Japan's largest bank, advanced 1.2 percent. Market heavyweight Fast Retailing slumped 3.7 percent after reporting an 11.7 percent decline in same-store sales at its Uniqlo clothing outlets.
In economic releases, activity in Japan's services sector expanded at the fastest pace in nine months in June, the latest Nikkei Services PMI showed, with a score of 51.8, up from 51.5 in May.
Australian shares fell sharply, dragged down by miners after iron ore prices suffered their largest single-day percentage loss seen in over a year overnight. Disappointing retail sales data and anxiety over Greece also sapped investors' appetite for risk. The benchmark S&P/ASX 200 index closed down 61.50 points or 1.10 percent at 5,538.30, snapping a three-day rally. The index fell as much as 1.9 percent early in the day after the brutal selloff in Chinese stocks.
Mining giant BHP Billiton dropped 1.5 percent, Rio Tinto shed 1 percent and smaller rival Fortescue Metals Group tumbled 4.7 percent. The big four banks closed down between 0.8 percent and 1.4 percent. Oil Search and Santos fell over 3 percent each as oil prices eased ahead of Sunday's crucial referendum in Greece. Myer Holdings and Harvey Norman holdings fell 1-2 percent after the release of retail sales data.
Australian retail sales rose 0.3 percent in May from the previous month, official data showed, weaker than the 0.5 percent increase economists had been expecting. Separately, the latest Australian Industry Group survey showed that Australia's services sector swung to expansion in June, driven by the finance and insurance services sectors.
Seoul shares closed a tad lower after three days of successive gains. The benchmark Kospi average slid 2.92 points or 0.14 percent to close at 2,104.41, dragged down by airline stocks. Korean Air Lines fell 3.3 percent, while Asiana Airlines dropped 2 percent. Market heavyweight Samsung Electronics tumbled 2.4 percent before the start of the earnings season. Orion Corp rallied 3 percent on the back of reports that it had failed in a bid to take over U.K. grocery chain Tesco's local unit, Homeplus.
New Zealand shares ended little changed in lackluster trade. The benchmark NZX-50 index slipped 0.57 points or 0.01 percent to finish at 5,840.90. Milk marketing firm A2 Milk paced the decliners, falling 3.9 percent to 75 cents, while Air New Zealand, Fletcher Building, Kathmandu Holdings, NZX and Xero lost about 1 percent each. Pumpkin Patch shares slumped 13 percent after the children's clothing retailer said it expects earnings next year to be "significantly below" this year.
Elsewhere, the Taiwan Weighted average fell 0.2 percent and Malaysian shares were little changed, while the benchmark indexes in India, Indonesia and Singapore were up between 0.3 percent and 0.7 percent.
U.S. stocks closed marginally lower overnight, with mixed U.S. jobs data and conflicting signals coming from Athens ahead of Sunday's referendum weighing on the markets. U.S. job growth slowed in June and the April and May figures were revised down, helping push back expectations of when the Federal Reserve will raise rates. New claims for jobless benefits rose last week and factory orders fell more than forecast in May, further dampening investor optimism about recent strength in the economy.
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