Asian stock markets mostly fell on Thursday as worries over the global economy sap confidence but the dollar held the previous day’s gains and oil prices extended a rally.
A disappointing set of readings and announcements from the world’s biggest economies over the past week have cast a pall over stock markets, reversing recent gains that were fuelled by hopes a recovery was taking hold.
Shares (Berlin: DI6.BE – news) in New York provided another negative lead, with the city’s three main indexes ending deep in the red after a payrolls group said far fewer private-sector US jobs were created last month than expected.
The figures came a day after figures showing sluggish manufacturing activity in China and a lower growth forecast for the eurozone, while data last week indicated US first-quarter economic growth was sharply lower than expectations.
The weak report also raised fears about Friday’s closely watched official April jobs report.
In Asian trade Hong Kong was off 0.3 percent and Singapore dipped 0.4 percent while Shanghai was 0.2 percent lower and Sydney was flat.
Tokyo and Seoul were closed for public holidays.
“Markets seem to be at something of a crossroads at present, waiting for clearer signals on whether US activity will bounce back in the second quarter,” Sharon Zollner, a senior economist in Auckland at ANZ Bank New Zealand, said in a client note.
The dollar enjoyed another day of buying on the back of comments from two Fed chiefs suggesting the US central bank could hike interest rates as soon as next month.
It (Other OTC: ITGL – news) was up 0.9 percent against the South Korean won, 0.2 percent against the Indian rupee and 0.4 percent versus the Indonesian rupiah. The oil-dependent Malaysian ringgit was 0.4 percent lower.
The dollar also rose to 107.11 yen from 107.03 yen in New York Wednesday and is well up from the 18-month low around 105.50 yen touched Tuesday.
However, the greenback is still almost 13 percent down against the Japanese currency owing to concerns about the global outlook. The yen is considered a safe bet in times of uncertainty.
Crude prices surged thanks to figures showing another fall in US oil output, while the wildfires burning in Canada’s Alberta region are also threatening production there, analysts said.
“The trend of declining US production is a real positive,” Michael McCarthy, chief strategist at CMC Markets (LSE: CMCX.L – news) in Sydney, told Bloomberg News. “I expect prices will probably touch the $ 48 to $ 50 zone. We will have to see significant inroads into crude stockpiles to push through that area.”
In late morning trade West Texas Intermediate was up 2.2 percent and Brent added 1.8 percent.
– Key figures around 0230 GMT –
Hong Kong: DOWN 0.3 percent at 20,471.25
Shanghai: DOWN 0.2 percent at 2,986.07
Tokyo: Nikkei 225: Closed for public holiday
Euro/dollar: UP at $ 1.1490 from $ 1.1488 Wednesday
Dollar/yen: UP at 107.11 yen from 107.03 yen
New York – Dow: DOWN 0.6 percent at 17,651.26 (close)
London – FTSE 100: DOWN 1.2 percent at 6,112.02 (close)
