Asian markets drop on US jobs news
HONG KONG—Asian markets fell sharply on Monday while the euro took a beating after a poor US jobs report added to fears that the world’s largest economy is facing a renewed recession.
Stocks were down across the board, following Wall Street’s lead, as investors piled into bonds, gold and other safe havens, seeking shelter from the gathering economic clouds.
Tokyo dived 1.86 percent, or 166.28 points, to 8,784.46, Sydney shed 2.38 percent, or 100.9 points, to 4,141.9 and Seoul plummeted 4.39 percent, or 81.92 points, to 1,785.83.
Hong Kong tumbled 2.95 percent, or 596.51 points, to 19,616.40 while Shanghai shed 1.96 percent, or 49.54 points, to 2,478.74, with traders citing fears about persistent inflation in China and its possible dampening effect on growth.
Markets in Asia were taking their lead from Wall Street’s performance on Friday, where the Dow Jones Industrial Average fell 2.20 percent to 11,240.26 on dismal August employment figures.
A meager 17,000 private-sector jobs were added in the US economy, down from a revised 156,000 in July. But that was offset by 17,000 jobs shed by government, figures revealed.
The Labor Department said the unemployment rate remained unchanged at 9.1 percent from July. The number of unemployed people was essentially unchanged, at 14 million.
The jobs data for August were the worst since September 2010, when the economy shed more than twice the number of jobs it created. The pace of job growth remains far below the numbers needed to reduce the high unemployment rate.
“Global growth prospects are in doubt, and nervous investors are likely to dump shares in favor of ‘safer havens’ such as gold and bonds,” said Michael McCarthy, chief market strategist at CMC Markets in Sydney.
“This (US jobs report) is likely to bring further calls for quantitative easing, despite the Federal Reserve’s apparent aversion,” he said, according to Dow Jones Newswires.
On Friday in the United States bond prices surged. The yield on the 10-year Treasury note fell to 2 percent from 2.15 percent late Thursday, while that on the 30-year bond dropped to 3.31 percent from 3.51 percent.
Bond prices and yields move in opposite directions.
Gold started the week on a high, hitting $1,892.10-$1,893.10 an ounce by 0940 GMT.
The euro dropped to $1.4146 from $1.4203 in New York late Friday. The European common currency also eased to 108.64 yen from 109.09 yen.
The greenback was at 0.7855 Swiss francs compared with 0.7885. It edged down to 76.79 against the yen, from 76.82.
The euro fetched 1.1113 against the Swiss franc, from 1.1210 late Friday in New York.
The euro took the brunt of selling on Friday after the EU and International Monetary Fund left a critical audit of Greek finances unfinished saying more budget work was needed, and the government admitted its deficit target was in trouble.
Finance Minister Evangelos Venizelos conceded that Greece would have to revise its public deficit target for this year, a key condition for continued funding from the 110-billion-euro ($158-billion) bailout loan agreed last year by the EU, the IMF and the European Central Bank.
Also negative for the euro was news that German Chancellor Angela Merkel’s Christian Democrats (CDU) suffered an election defeat in her home state Sunday, with the news unsettling the market, dealers said.
Crude fell on the US jobs numbers, with traders concerned that a slowdown in the economy of the world’s largest oil consumer heralds a dip in demand.
New York’s main contract, light sweet crude for delivery in October, dropped 91 cents to $85.54 per barrel.
Brent North Sea crude for October delivery shed 73 cents to $111.60.
In other markets:
— Singapore tumbled 2.46 percent, or 69.92 points, to 2,773.17.
DBS Group fell 2.75 percent to Sg$12.74 and Keppel Corp shed 3.02 percent to Sg$8.66.
— Taipei tumbled 2.65 percent, or 205.49 points, to 7,551.57.
Leading smartphone maker HTC fell 4.59 percent to Tw$707.0 while Taiwan Semiconductor Manufacturing Co lost 1.33 percent to Tw$66.6.
— Manila closed 0.24 percent, or 10.35 points, lower at 4,382.56.
Philippine Long Distance Telephone Co. slipped 0.66 percent to 2,402 pesos while SM Investments Corp. dropped 0.53 percent to 555 pesos.
But Lepanto Consolidated Mining bucked, rising 4.76 percent to 1.54 pesos.
— Wellington fell 0.31 percent, or 10.09 points, to 3,293.13.
— Kuala Lumpur closed 0.74 percent, or 10.97 points, lower to 1,463.12.
Budget carrier AirAsia lost 2.92 percent to 3.33 ringgit, while plantation firm Sime Darby fell 0.45 percent to 8.83. Financial firm Malayan Banking gained 0.11 percent to 8.73 ringgit.
— Jakarta gained 0.64 percent, or 24.44 points, to 3,866.17.
Telecoms company Indosat jumped 4.8 percent to 5,500 rupiah while rival Telkom rose 4.1 percent to 7,550 rupiah. Car maker Astra added 2.5 percent to 67,800 rupiah.
Food producer Indofood fell 2.5 percent to 5,950.
— Bangkok fell 1.50 percent, or 15.95 points, to 1,049.23.
— Mumbai fell 0.64 percent, or 108.13 points, to 16,713.33.
