Asian stocks retreated as investors awaited U.S. jobs data to gauge whether the economy is strong enough to withstand the first Federal Reserve interest-rate increase in almost a decade.
Sumitomo Rubber Industries Ltd. dropped 7.8 percent in Tokyo after the tire maker lowered its forecast for full-year operating profit. Dr. Reddy’s Laboratories Ltd. slumped 14 percent in Mumbai, the most since March 2004, after receiving a warning letter from the U.S. Food & Drug Administration over manufacturing facilities making pharmaceutical ingredients and oncology products. Asciano Ltd. jumped 8.1 percent in Sydney after Brookfield Infrastructure Partners bought a stake in the Australian rail and port operator and agreed to buy more shares to fend off a challenge to its proposed acquisition.
The MSCI Asia Pacific Index dropped 0.1 percent to 134.62 at 4:08 p.m. Hong Kong time, paring its weekly rise to 0.1 percent. Economists expect the October jobs report Friday to show an increase of 185,000 non-farm workers, compared with a gain of 142,000 the previous month. Federal Reserve officials underlined this week that the central bank is still data dependent. The prospect of higher U.S. borrowing costs this year has muddied the rally in global stocks from last quarter’s selloff, with central banks in Japan and the euro area remaining coy over whether they’ll bolster stimulus.
“The market is on tenterhooks ahead of the U.S.. non-farm payrolls,” Angus Nicholson, an analyst at IG Markets Ltd. in Melbourne, said by phone. “U.S. data has been somewhat mixed but the market has been responding more strongly to the Fed statements this week that they could hike rates this year.”
Hong Kong’s Hang Seng Index slipped 0.8 percent. South Korea’s Kospi index lost 0.4 percent. New Zealand’s S&P NZX 50 Index fell 0.1 percent. Singapore’s Straits Times Index decreased 0.4 percent. Australia’s S&P/ASX 200 Index gained 0.4 percent. Taiwan’s Taiex declined 1.8 percent. Japan’s Topix index added 0.6 percent, capping a third weekly gain, as a weaker yen boosted exporters.
China’s Shanghai Composite Index climbed 1.9 percent as shares of brokerages, technology and consumer companies rallied after the benchmark index entered a bull market. Monetary easing has supported stocks as well as signs that unprecedented state measures such as preventing major shareholders from selling shares and curbing short selling have stemmed the $5 trillion market rout.
“Perhaps some healthy gains could continue until the Shanghai index reaches the 4,000 level,” IG’s Nicholson said. “There should be quite a lot of positive economic data coming out of China as we go into the fourth quarter because there has been a significant amount of monetary easing.”
E-mini futures on the Standard & Poor’s 500 Index lost 0.1 percent on Friday. The underlying U.S. equity gauge slipped 0.1 percent on Thursday as investors weighed the outlook for interest rates and the economy. Traders are predicting a 56 percent chance the Fed will raise rates at the December meeting.