Concerns about the strength of economic recovery in the United States weighed on Asian stocks July 29, with traders cashing in profits from recent gains in banks.

Eyes were on the world's biggest economy after the Federal Reserve said on July 28 that while conditions were improving, the gains were "modest."

The tepid assessment pushed most Asian markets lower, with Tokyo's Nikkei closing down 0.59%, or 57.25 points, at 9,696.02.

Sydney ended down 0.13%, or 5.8 points, at 4,524.1, while Hong Kong was flat at 21,093.82.
The losses came after four days of broad gains, which had been led by buying in banks after upbeat news from European stress tests last week and reports that planned tighter regulation of the global banking industry had been watered down.

Markets on July 29 were following a 0.38% drop on the Dow, which came after an anticipated Beige Book report turned out more pessimistic than the previous survey. That came on top of concerns about high unemployment and weak business confidence.

The book said that "economic activity has continued to increase, on balance, since the previous survey" in early June, but noted significant headwinds.

"Among those districts reporting improvements in economic activity, a number of them noted that the increases were modest, and two districts... said that the pace of economic activity had slowed recently."

It also pointed to sluggishness in the housing market and retail sales, a key driver of the U.S. economy.

The downbeat assessment was compounded by news that orders for big-ticket items suffered the biggest drop in almost a year in June.

New orders for "manufactured durable goods" -- such as planes, cars, refrigerators and computers -- fell by $2 billion, or 1%, from the previous month, the Commerce Department said.
Analysts had expected a rise of 1.1%.

Copyright Agence France-Presse, 2010