Asian markets swag ahead of US Jobless data

Sydney, Sensex, Hang Seng finish lower while Seoul, Shanghai post gains

Stock markets in Asian region flagged on Friday, 4 December 2009, as investors turned cautious before monthly US jobs data scheduled to release in the evening. The regional markets remained subdued from the morning as an unexpected contraction in U.S. service industries sparked concern about the strength of the global economic recovery.

On Wall Street, Stock markets sold off sharply in the last moments of trading Thursday, as investors turned skittish ahead of Friday's highly anticipated jobs report. The Dow Jones Industrial Average closed down by 87 points, or 0.8%, at 10,366. The S&P 500 slid 9 points, or 0.8%, at 1100, as the Nasdaq shed 12 points, or 0.5%, to 2173.

On the economic front, initial claims filed by U.S. workers for unemployment benefits fell to a better-than-expected rate to 457,000 in the week ended 28 November, which helped mitigate investor disappointment in an unexpected contraction in the U.S. service sector.

The Labor Department also issued its final reading on third-quarter productivity. Although it was downwardly revised to an increase of 8.1%, from an initial reading of a 9.5% jump, the Labor Department said the rise marked the largest gain in productivity since the third quarter of 2003. The Institute for Supply Management said its service index fell to 48.7 in November, which was lower that October's 50.6 reading and missed expectations for an increase to 51.5. A reading above 50 indicates growth.

In the commodity market, crude oil fell for a third day after a report showed service industries in the U.S. unexpectedly contracted in November, raising concern fuel demand may be slow to recover from the worst recession since World War II.

Crude oil for January delivery fell as much as 85 cents, or 1.1 percent, to $75.61 a barrel in electronic trading on the New York Mercantile Exchange. It was at $76.23 at 3:27 p.m. Singapore time.

Brent crude oil for January settlement fell as much as 82 cents, or 1.1%, to $77.54 a barrel on the London-based ICE Futures Europe exchange. The contract traded at $78.33 a barrel at 3:30 p.m. in Singapore.

Gold fell for a second day, paring a weekly advance, on speculation that signs of a slowing recovery will boost the dollar and as record prices deter investors. Silver, platinum and palladium also slumped. Bullion for immediate delivery fell 0.4% to $1,203.01 an ounce at 1:35 p.m. in Singapore. Gold for February delivery fell 1.2% to $1,204 an ounce on the Comex division of the New York Mercantile Exchange.

In the currency market, movement was mixed as investor’s await Non-Farm Payrolls report from US.

The Japanese currency softened for fourth consecutive day against major counterpart on Friday. The yen was quoted at 88.2 against greenback.

The Hong Kong dollar was trading at HK$ 7.7501 against the dollar. Actually the Hong Kong dollar is pegged at HK$ 7.8 to the U.S. dollar but can trade between HK$ 7.75 and HK$7.85 to the U.S. dollar.

In Sydney trade, the Australian dollar fell on Friday after investors locked in profits to protect themselves against sharp market moves before a US jobs report. At the local close, the dollar was buying $US0.9225, after testing a support level around $US0.9214 earlier in the day. It had closed at $US0.9281 here on Thursday.

In Wellington trade, the New Zealand dollar market settled down ahead of the release of United States monthly jobs data for November later today. The NZ dollar was at US72.22c at 5pm from US72.60c at 8am and US72.68c at 5pm yesterday. It rose as far as US73c on Thursday night.

The South Korean won closed at 1,153 won to the U.S dollar, up 2.3 won from Thursday's close of 1,155.3.

The Taiwan dollar strengthened against the greenback. The Taiwan dollar was trading higher against the US dollar at NT$ 32.1440, 0.0060 up from Thursday’s close of NT$32.1500.

In the equities, Asian stock markets closed the week mostly lower as a late sell off on Wall Street kept many buyers sidelined, while a battle for a slice of Japan Airlines saw that stock take off.

In Japan, shares market extended winning streak for fifth consecutive day, with the key Nikkei index breached 10,000 barrier for the first time in over five weeks, buoyed by strong gains in export related stock such as Hitachi, Canon and Honda Motor on the heels of a weaker yen. Softening domestic currencies easing worries over its recent sharp appreciation and calm exporters whose overseas profits would be higher when repatriated into the yen.

At the closing bell, the Nikkei 225 Stock Average index was at 10,022.59, spurted 44.92 points or 0.45% from its previous close, while the broader Topix of all First Section issues on the Tokyo Stock Exchange gained 1.54 points, or 0.17%, to 889.58. For the week, the Nikkei 225 Stock Average index witnessed awesome gains of 941.1 points or 10.36%, while the broader Topix index bounced 78.57 points or 9.69%.

In Mainland China, stock market finished the session higher after a weak start on tracking lower US market overnight following the weak data on the services sector, but recouped from intraday low of 2,214.84 points before finishing at 3,317 points.

The Shanghai Composite Index, measuring A shares and B shares on the Shanghai Stock Exchange, rose 52.41 points, or 1.61%, to 3,317.04, meanwhile the Shenzhen Component Index on the smaller Shenzhen Stock Exchange advanced 0.91% or 125.09 points, to 13,884.93. The CSI 300 Index, measuring exchanges in Shanghai and Shenzhen, gained 1.47%, to 3,643.49.

The Shanghai Composite index made a stellar recovery this week, raised 220.78 points, or 7.13%, while the CSI 300 Index spurted 260.98 points or 7.72%, for the week ended Friday, 4 December 2009.

In Hong Kong, the stock market trimmed steep morning losses to end of the day lower, snapped four straight days of winning streak, in broad-based selloff among materials and resources as investors wait anxiously for the release of all important US jobs figures tonight. Financials and properties were weaker amid worries about possible asset bubbles in the property market.

At the closing bell, the Hang Seng Index stumbled 55.72 points, or 0.25%, to 22,498.15, meanwhile the Hang Seng China Enterprise, which tracks the overall performance of 43 mainland Chinese state-owned enterprises on the Hong Kong Stock Exchange, rose 2.49 points, or 0.02%, to 13,461.55.

The Hong Kong benchmark Hang Seng Index spurted 1,363.65 points or 6.45%, while Hang Seng China Enterprises bounced 989.42 points or 7.93%, in the week ended Friday, 4 December 2009.

In Australia, the stocks tumbled by the end of the day, snapping four days of winning streak, with broad based sell off triggered across the sector for gains after a four-days of strong rally. Investors’ sentiments turns cautious after the US market declined overnight as an unexpected contraction in US service industries raised concern the economic recovery is flimsy.

Materials and financials shares hit hard by the sell-off, after most of the bank raise their home loan rate by more than RBA’s step on Tuesday and pullback in metal prices, and cautious ahead of the release of US unemployment figure tonight.

At the closing bell, the benchmark S&P/ASX200 index surrendered 72.4 points, or 1.52%, to 4,702.2, meanwhile the broader All Ordinaries stumbled 68.1 points, or 1.42%, to 4,721.2. The benchmark S&P/ASX200 index surged 130.10 points, or 2.85% in the week ended Friday, 4 December 2009, meanwhile the Broader All Ordinaries added 124 points or 2.7%, during same period.

In New Zealand, benchmark index ended its four-day winning streak to end the last trading day of the week in the negative region. The NZX50 decreased 0.24% or 7.47 points to 3146.46. The NZX 15 fell 0.38% or 21.53 points to close at 5704.52.

In South Korea, stocks closed higher as stronger third-quarter growth data boosted recovery optimism. The benchmark Korea Composite Stock Price Index (KOSPI) gained 9.76 points to end at 1,624.76, taking its winning streak to a fifth session.

In Taiwan, stock market in Taiwan snapped four days winning rally as investors decided to take some profit from the recent gains as outlook uncertain ahead of local election in the Taiwan. Taiwan goes to polls Saturday to elect new mayors, magistrates and local legislators. The ruling Kuomintang party (KMT) has been campaigning hard for the elections, which are seen as a mid-term test for President Ma Ying-jeou. A victory by the China-friendly Nationalist Party would be beneficial for ties across the Taiwan Strait. The benchmark Taiex share index snatched its four days rally on Friday, by finishing lower by 33.76 points or 0.44% in a day, closing at 7650.91.

In India, the key benchmark indices lost ground as weak US services sector data fueled worries of a weaker-than-expected jobs report in the US, due later in the global session. Stocks fell in Europe in after mixed performance of Asian stocks. The BSE 30-share Sensex was down 84.14 points or 0.49% to 17,101.54. The S&P CNX Nifty was down 22.80 points or 0.44% to 5108.90.

Elsewhere, Malaysia’s Kula Lumpur Composite index finished lower at 1270.20 while stock markets in Indonesia’s Jakarta Composite index gained 11.51 points ending the day higher at 2511.54.

In other regional market, European shares edged lower, with banks under pressure, as investors wait for data that's expected to show the U.S. economy is still shedding jobs. On a regional level, the U.K. FTSE 100 index declined 0.6% or 33.45 points to 5,380, the German DAX index declined 0.55% or 31.78 points to 5,739 and the French CAC-40 index lost 0.53% or 19.97 points to 3,779.