Asia Stocks Fall Ahead of U.S. Jobs Data as China Reopens Lower

  • ‘Investors are really cautious’ before payrolls: BDO Unibank
  • Japanese shares gain as BOJ bond buying operation weakens yen

Asian shares fell as Chinese stocks declined when trading resumed after a week-long break while investors wait for a U.S. nonfarm payrolls report later Friday that could indicate the timing of rate increases by the Federal Reserve.

The MSCI Asia Pacific Index reversed a two-day gain, with materials and industrial shares the biggest drag. China shares in the mainland slid as the central bank raised interest rates in open-market operations and as they priced in concern over U.S. President Donald Trump’s policies. The Topix index rose in Tokyo as government bond yields retreated and the yen weakened after the Bank of Japan offered to buy an unlimited amount of bonds at a fixed rate to reassert control over surging yields. India’s shares were poised to halt a two-day rally.

“Investors are really cautious, taking a defensive posture, as they wait and see what U.S. jobs data will show about the economy and the pace of rate increases,” said Jonathan Ravelas, chief market strategist at BDO Unibank Inc. “The direction of global interest rates is also a key element keeping investors at bay.”

Still, the MSCI Asia-Pacific Index has risen 4.8 percent since Dec. 31, the best start to a year since 2012. A combination of a strong U.S. economy and a strong dollar could provide more upside for the region’s stocks and extend valuations, which are above the five-year average, said Cristina Ulang, head of research at First Metro Investment Corp.

“A strong U.S. economy will suggest and support a strong dollar and that’s not a necessarily bad for Asia and exporters,” Ulang said. “A strong dollar will make currencies and exporters in the region more competitive while a strong U.S. economy means stronger demand and more opportunities. It’s better opportunities for Asia provided Trump’s protectionist policies won’t shut the entire U.S. market.”


Summary

  • MXAP -0.2% at 3:34 p.m. in Hong Kong
  • Topix +0.3%, Nikkei 225 little changed; yen -0.2% to 113.04 per dollar
  • Shanghai Composite Index -0.6%, Shenzhen CSI 300 -0.7%
  • Hang Seng Index -0.4%, Hang Seng China Enterprises Index -0.1% in Hong Kong
  • Nissan Chemical -7.5% after 3Q earnings miss estimates
  • Nintendo +6.3% as company’s new smartphone game debuts strongly in Japan
  • Australia’s S&P/ASX 200 Index -0.4%; New Zealand’s S&P/NZX 50 Index +0.6%
  • India’s Sensex -0.2%
    • Reliance Communications +9.1% after Indian court discharges Maran brothers in the Maxis-Aircel case boosts speculation of a merger between the company and Aircel
  • South Korea’s Kospi +0.1%
  • Taiwan’s Taiex +0.3% 
  • Vietnam’s VN Index -0.3%
  • Straits Times Index, Philippine Stock Exchange Index little changed
  • Malaysia’s KLCI Index +0.5%

For more news:
Bank of Japan Whipsaws Markets in Tussle Over Yield Control
No Fireworks for China Stocks as Central Bank, Trump Spoil Party
China Tightens Monetary Policy by Raising Money Market Rates
Labor Market Is Moving Closer to the Danger Zone for U.S. Stocks
Gold Demand Rises to Three-Year High on Political Upheaval

Before it's here, it's on the Bloomberg Terminal.
LEARN MORE