Hong Kong: Asian shares, oil and higher-yielding currencies rose on Friday as positive signals from the latest US weekly jobs data sparked tentative optimism ahead of the crucial monthly employment report.
A surge in oil prices to seven-month highs bolstered resource stocks, while Sydney listed shares of Rio Tinto Ltd and BHP Billiton Ltd surged after they announced an agreement to combine their Australian iron ore mines and Rio announced a $15.2 billion (Rs71,592 crore) rights issue.
US non-farm payrolls data, is expected to show employers cut 520,000 jobs in May, lower than 539,000 in April, and the unemployment rate is forecast to rise to 9.2% from 8.9% in April.
Changing signs: An investor reacts as he looks at the stock price monitor in Shanghai, China. Stocks in China fell 0.5% on Friday. Eugene Hoshiko / AP
A much worse-than-expected report could dampen expectations that the worst is over for the global economy, which have sent stock markets from Seoul to London surging since early March.
It could also serve as a reminder of the bearish evidence that has been downplayed so far, such as evidence that American consumers, the lynchpin of global exports, are cutting spending.
“If the numbers are better than expected investors will get confirmation that the economy’s really improving but there’s worry about what will happen if the figures are worse than consensus,” said Yumi Nishimura, a deputy general manager of the investment advisory section at Daiwa Securities SMBC Co. Ltd.
The MSCI index of Asia-Pacific stocks outside Japan rose more than 1%, rebounding from a 1.9% fall on Thursday. The index rose close to 3% on the week, taking gains to more than 60% from lows hit in early March. Resource shares gained after oil prices surged on hopes that the global recession had bottomed out. Japanese oil and gas field developer Index rose 4.8%.
Jumps in Australian-listed shares of BHP Billiton and Rio Tinto helped push up Australia’s main index nearly 1%. The deal effectively scuppered a $19.5 billion bid by Aluminium Corp. of China to secure a stake in debt-laden Rio.
Japan’s Nikkei average rose 1%, as did Hong Kong’s Hang Seng. South Korean and Singapore shares gained more than 1%, as India lost 0.6%. Stocks in China and Taiwan fell 0.5% and 0.3%, respectively.
Gains in Asian shares were also underpinned by data on Thursday showing fewer US workers filed new claims for jobless benefits for a third straight week and productivity rose faster than expected in the first quarter.
Still, not all signals have been positive.
Most US retailers posted disappointing May sales as recession-weary shoppers cut spending, while in another worrisome sign, US mortgage rates surged to their highest in almost six months in the latest week, despite government efforts to keep rates at low levels.
Central banks worldwide still remain cautious. The Bank of Japan is considering upgrading its views on the economy, sources at the central bank told Reuters, but even then they said the upgrade will be a shift to less pessimism rather than a swing to optimism.
Oil had risen in Asian trade to above $69 a barrel but fell below that mark in morning European trade. It still remained close to a seven-month high, supported by a rally in stock markets and expectations that the global economic downturn may not be as severe as expected.
Also helping sentiment was Goldman Sachs lifting its end of 2009 oil price forecast to $85 from $65 and introducing a new end-2010 forecast of $95.
In currency markets, investors switched to higher-yielding plays, though moves were tempered ahead of the US jobs data.
The dollar index, a gauge of the greenback’s performance against a basket of six major currencies, rose 0.1%.
Commodity-linked currencies held firm. The Australian dollar rose 0.2% to $0.8038.
After sharp falls on Thursday following the resignation of a third senior minister from the UK government, sterling fell 0.8% to $1.6050, weighed by the political uncertainty.