Asian stock markets subdued after Wall Street slip

A man stops at a crossing outside a securities firm in Tokyo, Wednesday, Nov. 6, 2013. Asian stock markets mostly flitted between gains and losses Wednesday after an improvement in U.S. service industries reinforced expectations the Federal Reserve will reduce monetary stimulus that has propelled stocks higher. AP PHOTO/JUNJI KUROKAWA

HONG KONG—Asian stocks were mixed Wednesday although Tokyo was lifted by strong corporate sentiment, while upbeat US service-sector data added to speculation the Federal Reserve will soon start tapering off its stimulus.

The euro rose following early losses which were sparked by an official downgrade of eurozone economic growth for 2014.

Tokyo finished 0.79 percent higher, adding 111.94 points to 14,337.31 and reversing morning losses after a report said car giant Toyota would post strong earnings for its fiscal first half.

Sydney was flat, edging up 1.8 points to 5,433.8. Seoul was also flat, dipping 0.26 points to 2,013.67.

Shanghai fell 0.82 percent, or 17.63 points, to 2,139.61. Hong Kong ended almost unchanged, dipping 2.01 points to 23,036.94.

While the focus is on US third-quarter growth data and October jobs figures later this week, the non-manufacturing numbers indicated the economy is showing signs of strength.

The ISM purchasing managers’ index for the service sector rose to 55.4 percent in October—up from a September reading of 54.4 percent and much higher than the expected 54.0 percent.

A figure above 50 indicates growth while anything below suggests contraction.

Analysts highlighted a surge in the employment reading for the services sector, which accounts for about 80 percent of private-sector jobs.

The positive numbers show the recovery in the world’s No. 1 economy is gaining traction, but raise questions about the future of the Fed’s stimulus.

The bank has said it will only begin cutting back on its $85 billion a month bond-buying scheme—which has been credited with sparking a global stocks rally—once the economy is strong enough.

“The… data indicated that the impact of the US government’s partial shutdown (at the start of October) was limited,” Hiroichi Nishi, general manager of equities at SMBC Nikko Securities, told Dow Jones Newswires.

On Wall Street Tuesday the Dow eased 0.13 percent, the S&P 500 dipped 0.28 percent and the Nasdaq edged up 0.08 percent.

The euro made gains in the afternoon, after early losses fueled by news that European Union officials had cut their 2014 growth forecast for the eurozone to 1.1 percent from the 1.2 percent forecast in May.

The figures—along with data showing inflation fell to a four-year low of 0.7 percent in October—dented hopes for a strong recovery in the bloc, but fueled speculation the European Central Bank would cut interest rates or announce other growth-positive measures.

The single currency sat at $1.3503 and 133.07 yen in the afternoon, compared with $1.3474 and 132.76 yen in New York on Tuesday. However, it is still well down from the $1.3738 and 135.35 yen in the middle of last week before the inflation data.

The dollar stood at 98.58 yen against 98.53 yen.

Tokyo shares enjoyed a U-turn after lunch thanks to a Nikkei news report that Toyota would announce strong six-month earnings figures and upgrade its annual forecasts, thanks largely to a weaker yen and strong sales in North America. Toyota ended 0.47 percent higher at 6,350 yen.

After the closing bell, the car giant posted a net profit of one trillion yen, up 82.5 percent from a year earlier. It also raised its profit forecast for the year to March to 1.67 trillion yen, from 1.48 trillion yen previously estimated.

Oil prices rose. New York’s main contract West Texas Intermediate for December delivery gained 48 cents to $93.85 a barrel after sinking to a five-month low in New York. Brent North Sea crude for December climbed 59 cents to $105.92.

Gold was at $1,317.35 per ounce at 01042 GMT compared with $1,311.73 on Tuesday.

In other markets:

— Mumbai closed down 0.38 percent, or 79.85 points at 20,894.94 points.

Government-owned lignite mining and power generating company Neyveli Lignite Corporation rose 14.66 percent to 68.45 rupees, while Indian Bank fell 8 percent to close at 102.90 rupees.

— Jakarta ended up 0.60 percent, or 26.47 points, at 4,449.76.

Palm oil firm Astra Agro Lestari rose 1.97 percent to 20,700 rupiah, while mobile phone provider Indosat fell 3.61 percent to 4,000 rupiah.

— Singapore closed down 0.01 percent, or 0.25 points, at 3,205.29.

United Overseas Bank rose 0.77 percent to Sg$20.96, while Jardine Cycle and Carriage gained 0.25 percent to Sg$36.77.

— Kuala Lumpur lost 4.42 points, or 0.24 percent, to close at 1,803.05.

Utility Tenaga Nasional shed 0.1 percent to 9.39 ringgit, while Axiata Group fell 0.4 percent to 6.85. Budget airlines AirAsia rose 0.4 percent to 2.63 ringgit.

Bangkok added 1.38 percent, or 19.53 points, to 1,434.97.

— Telecoms company Advanced Info Service lost 2.02 percent to 242 baht, while supermarket operator Big C Supercenter gained 5.29 percent to 199.

— Taipei rose 0.24 percent, or 19.77 points, to 8,281.97.

Taiwan Semiconductor Manufacturing Co. edged up 0.47 percent to Tw$107.0 while leading food maker Uni-President Enterprise shed 1.11 percent to Tw$53.5.

— Wellington rose 0.12 percent, or 5.87 points, to 4,944.57.

Ryman Healthcare ended up 1.8 percent at NZ$7.91 and Telecom was down 1.1 percent at NZ$2.31.

— Manila fell 0.65 percent, or 42.28 points, to 6,477.30.

Philippine Long Distance Telephone dropped 0.36 percent to 2,800 pesos and port operator International Container Terminal Services slipped 0.57 percent to 105.40 pesos.

Originally posted at 02:52 pm |Wednesday, November 6, 2013