Asian Stocks Set for Seventh Weekly Loss Before U.S. Jobs Report

  • Hang Seng Index caps longest weekly loss streak since 2008
  • Chinese markets remain closed for holiday commemorating WWII

Asian stocks fell ahead of the monthly U.S. jobs report, with the regional gauge on course for a seventh week of losses as energy and consumer shares slumped.

The MSCI Asia Pacific Index declined 1 percent to 124.87 as of 4:06 p.m. in Hong Kong. The gauge has slumped 4.8 percent this week, on course for its longest streak of weekly losses in four years. The measure is down more than 20 percent from its seven-year high in April.

U.S. shares on Thursday pared gains in afternoon trading in New York as optimism about European central bank stimulus gave way to anxiety over Friday’s jobs report and its implications on Federal Reserve interest-rate policy.

“The next few months are likely to remain rough for shares,” said Shane Oliver, Sydney-based global strategist at AMP Capital Investors Ltd., which oversees about $109 billion. “Worries about China and the Fed are likely to linger for a while. It’s still too early to be confident we have seen the low.”

The payrolls report on Friday represents the last major data point before the Fed meets to discuss the first increase in interest rates in nearly a decade. U.S. data on Thursday showed jobless claims rose more than forecast last week, while a measure of the services industry hovered just below a 10-year high.

Futures traders are betting the Fed will push back raising its fed funds rate. The probability of an increase in September has fallen to 30 percent, from 38 percent at the end of last week, according to data compiled by Bloomberg.

Japan’s Topix index retreated 2.1 percent on Friday to cap a 6.8 percent slump this week, its fourth straight weekly loss.

Hong Kong’s Hang Seng Index fell 0.5 percent and the Hang Seng China Enterprises Index of mainland firms listed in the city lost 1.4 percent after markets in the former British colony reopened following a holiday. Mainland Chinese markets remain closed until Monday.

UBS Group AG lowered its target for the Hang Seng gauge by 25 percent, saying its worst-case scenario for the city is coming true as the economy weakens and tourism arrivals decline. The index, which last month entered a bear market and is the developed world’s worst-performing stock gauge this quarter, trades at 9.8 times projected 12-month earnings, compared with its five-year average of 10.8.

South Korea’s Kospi index lost 1.5 percent and Australia’s S&P/ASX 200 Index added 0.3 percent. India’s S&P BSE Sensex Index slumped 2.1 percent and Taiwan’s Taiex Index slipped 1.2 percent. New Zealand’s NZX 50 Index fell 0.4 percent and Singapore’s Straits Times Index declined 1.2 percent.

Using Pullbacks

“I would say use the volatility and pullbacks in the markets to put some money into the markets,” Vasu Menon, vice president of wealth management at Oversea-Chinese Banking Corp., told Bloomberg TV from Singapore. “Nobody can be 100 percent sure where exactly markets are headed in the short term, but we’re still medium-term positive on equity markets. Valuations we don’t think are in bubble territory, there’s enough liquidity and economic growth is healthy enough.”

The Stoxx Europe 600 Index climbed 2.4 percent Thursday as investors took assurances of central-bank support after the China-fueled volatility of the past month. The Standard & Poor’s 500 Index advanced 0.1 percent in New York, after briefly erasing gains of more than 1 percent. E-mini futures on the S&P 500 fell 0.5 percent on Friday.

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