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Business News/ Market / Stock-market-news/  Asian stocks fall from six-year high before US payrolls data
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Asian stocks fall from six-year high before US payrolls data

Asian markets in wait-and-see mood before US jobs data; strong ADP report fuels hopes for upbeat US jobs data

The MSCI Asia Pacific index lost 0.1% to 147.24 after gaining 0.1%. Photo: Bloomberg Premium
The MSCI Asia Pacific index lost 0.1% to 147.24 after gaining 0.1%. Photo: Bloomberg

Tokyo: The benchmark index of Asian stocks fell from a six-year high as private data showed US companies added more workers than estimated before a government payrolls report on Thursday.

Li & Fung Ltd, a supplier of toys and clothes, plunged 10% in Hong Kong after the shares traded without rights to its spinoff. Dai-ichi Life Insurance Co. fell 2.3% on a report the Japanese insurer will approve a share sale. Anhui Conch Cement Co., China’s largest producer of the building material, rose 5.6% in Hong Kong after saying it expects first-half profit will surge.

The MSCI Asia Pacific index lost 0.1% to 147.24 as of 4:13pm in Hong Kong after gaining 0.1%. Eight of its 10 industry groups fell. The gauge rose the past three days to its highest close since 6 June 2008. Its relative strength index, a measure of trading momentum, advanced to 74 on Wednesday, above the 70 threshold some traders say portends a selloff.

“Investors are in a wait-and-see mode before the big event on Thursday and the market is bound to take a pause from a technical standpoint," said Toshiyuki Kanayama, Tokyo-based senior market analyst at Monex Inc.. “The market is expecting the jobs data will top 200,000, but you never know until it comes out. It could miss estimates."

Regional gauges

Japan’s Topix index and South Korea’s Kospi index both fell 0.2%. Australia’s S&P/ASX 200 index gained 0.7%, while New Zealand’s NZX 50 index added 0.4%. Taiwan’s Taiex index gained 0.4% and Singapore’s Straits Times index rose 0.5%.

Hong Kong’s Hang Seng index fell 0.1%. The Hang Seng China Enterprises index of mainland stocks traded in the city advanced 0.1%. The Shanghai Composite index rose 0.2%. India’s S&P BSE Sensex index added less than 0.1%.

An index of China’s services industry from HSBC Holdings Plc and Markit Ltd rose to 53.1 in June from 50.7 in May, the highest reading since March 2013, a report showed on Thursday. Figures above 50 indicate expansion. Separate data showed the official non-manufacturing gauge slid to 55 in June from 55.5 the month before.

Futures on the Standard & Poor’s 500 index were little changed on Thursday. The measure added 0.1% on Wednesday to close at a record.

US companies added 281,000 workers in June, figures from the ADP Research Institute showed on Wednesday. The median projection of economists surveyed by Bloomberg called for an advance of 205,000. The private report precedes a labour department report on Wednesday that may show nonfarm payrolls rose by 215,000 in June, according to the median of economists’ estimates. A separate release on Wednesday showed that US factory orders fell 0.5% in May.

‘Good rebound’

Data from employment to housing is fuelling confidence that the world’s largest economy is rebounding after contracting in the first quarter by the most since 2009.

The first quarter was weaker than most people expected, but we’ve seen a good rebound subsequently, said Tim Schroeders, a portfolio manager who helps oversee $1 billion in equities at Pengana Capital Ltd in Melbourne. There’s growth in jobs data and the US economy is accelerating, which has positive implications for the market.

Federal Reserve chair Janet Yellen said on Wednesday there is no need to change current US monetary policy to address concerns over financial stability.

Li & Fung

Li & Fung plummeted 10% to HK$10.44. On Wednesday was the last day for holders of the stock to be entitled to shares of the company’s spinoff. The parent said Global Brands Group is expected to start trading in Hong Kong on 9 July.

Dai-ichi Life fell 2.3% to 1,502 yen in Tokyo. The Nikkei newspaper said its board will approve a 250 billion yen ($2.5 billion) sale of shares to acquire Protective Life Corp..

Anhui Conch rose 5.6% to HK$29.10 in Hong Kong on saying it expects first-half net income will surge about 90% from a year earlier.

Malaysian Airline System Bhd surged 9.5% to 23 sen after the Wall Street Journal reported the nation’s sovereign investment company is looking at the possibility of taking the airline private to tackle financial problems.

Toshiba Corp. rose 2.5% to 484 yen in Tokyo after the Nikkei newspaper reported it’s expected to win a 500 billion yen order to build a nuclear reactor in Bulgaria.

The Asia-Pacific gauge traded at 13.5 times estimated earnings as of Wednesday, compared with 16.7 for the S&P 500 and 15.6 for the Stoxx Europe 600 index, according to data compiled by Bloomberg. Bloomberg

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Published: 03 Jul 2014, 08:49 AM IST
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