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Asian stocks mixed on patchy US economic data

Hong Kong - Asian stocks ended mixed on Thursday, with most markets taking a hit after patchy US economic data fed economic uncertainty while Tokyo got a boost from a weaker yen.

US data showing the service sector expanded to a record high in July strengthened the case for an earlier interest rate hike from the Federal Reserve, analysts said, providing a boost for the dollar.

The gains in the greenback pushed down the yen by comparison - a weaker Japanese currency makes exporters more competitive - and helped push up Tokyo stocks 0.24% to close at 20 664.64.

US stocks pushed higher on Wednesday after the Institute for Supply Management said the service industry expanded 4.3% in July, but payroll firm ADP said the private sector added 185 000 jobs last month, below analysts' estimate of 220 000.

"The weaker currency will be a tailwind for Japanese stocks. We'll still see a focus on individual earnings results," Yutaka Miura, a technical analyst at Mizuho Securities, told Bloomberg News.

The Bank of Japan began a two-day meeting Thursday, with all eyes on signs of when policymakers may launch further easing measures.

Elsewhere, Seoul lost 0.81% dragged down by technology firms and mobile carriers, to 2 013.29.

Shanghai fell 0.89% to close at 3 661.54, while Hong Kong shed 0.57% to 24 375.28.

Sydney slid 1.13% to close down 63.9 points at 5 610.10 after taking a hit from a jump in unemployment to 6.3% in July and news ANZ Bank will sell Aus$2.5bn of shares.

Analysts floated the possibility of an interest rate cut following the spike in joblessness, which came despite a hiring surge.

"The market is downplaying stronger jobs growth given the rise in unemployment," Kieran Davies, chief economist at Barclays Plc in Sydney, told Bloomberg News.

"I see a risk of a further rate cut given the Australian dollar still looks overvalued."

Australia's unemployment rate has edged up over the past year to its highest in almost a decade, while wages growth has been weak and business investment outside the mining sector remains soft.

Adding to concerns over the economy, mining giant Rio Tinto after the bell announced its first-half net profit had fallen 82%, hit by a supply glut and waning Chinese demand.

Shanghai jitters

In Shanghai, a second day of losses after a recent market rout compounded fears for the Chinese economy.

The Shanghai Composite Index has tumbled nearly 30% from its highest point in June over fears for the health of the world's second-biggest economy.

Investors are still jittery despite a raft of measures from Beijing to prop up the share market, including restrictions on short selling, the suspension of initial public offerings (IPOs) and a trading halt for some companies.

"The market needs its own strength to recover," Zhang Haidong, chief strategist at Jinkuang Investment Management in Shanghai, told Bloomberg.

"The coming economic data don't seem to be good and will add additional pressure," he said, referring to export and trade data due out this weekend.

US stocks finished mostly higher Wednesday, but a disappointing earnings report from Disney weighed on the Dow Jones Industrial Average. Traders are now focusing on Friday's official US employment figures.

Oil prices were mixed as dealers digested an US energy report showing a big drawdown in crude stockpiles - but also an increase in domestic production.

US benchmark West Texas Intermediate for September delivery fell 17 cents to $44.98 while Brent crude for September gained 9c to $49.68.

"Crude prices continued to remain weak with focus on oversupply," said Sanjeev Gupta, head of the Asia-Pacific oil and gas practice at business consultancy firm EY.

In forex trade, the dollar was near a two-month high against the yen on bets the Fed would hike rates in September.

The greenback bought ¥124.85, against ¥124.88 in New York on Wednesday when it briefly crossed the ¥125 level, its highest since early June.

The euro stood at $1.0899 and ¥136.08 compared with $1.0904 and ¥136.18 in US trade.

Gold fetched $1 085.75 an ounce compared with $1 085.72 late on Wednesday.

In other markets:

- Taipei fell 1.09% to 8 449.56.

Leading smartphone camera lens maker Largan Precision plunged by 10.0% to Tw$2,720.

- Wellington closed down 0.17% at 5 928.69.

Contact Energy went against the trend, rising 3.16% to NZ$5.22, while Fletcher Building dropped 0.13% to NZ$7.97

- Manila closed down 0.95% at 7 589.95.

Top-traded Universal Robina fell 2.50% to 195 pesos, SM Prime Holdings lost 0.91% to 21.80 pesos while Philippine Long Distance Telephone was down 2.10% to 2 800 pesos.

- Bangkok fell 0.40% to 1 430.58.

Telecoms company Advanced Info Service dropped 1.64% to 240.00 baht, while Siam Commercial Bank slid 1.32% to 149.50 baht.

- Kuala Lumpur's main index fell 1.79% to 1 694.64.

Maybank fell 1.31% to 9.07 ringgit, Telekom Malaysia was down 0.15% to 6.62 while Genting Malaysia dropped 2.83% to 4.12 ringgit.

- Singapore rose 0.17% to 3 196.66.

Real estate developer Capitaland gained 1.58% to Sg$3.22 while Singapore Telecom eased 0.25% to Sg$4.06.

- Jakarta was down 0.91% at 4 806.57.

Dharma Samudera Fishing Industries gained 12.20% to 184 rupiah, while automotive manufacturer Nipress fell 8.62% to 530 rupiah.

- Mumbai was up 0.27% at 28 298.13 points.

Engineering major Larsen & Toubro gained 2.74% to 1 827.30 rupees, while fast moving consumer goods major ITC fell 1.70% to 326.05 rupees.


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