By Lynn Thomasson and Norie Kuboyama - Apr 9, 2012 9:32 AM GMT+0700
U.S. equity futures fell and Asian stocks dropped for a fourth day as data on job creation in the world’s biggest economy trailed estimates. The yen strengthened to a one-month high against the dollar, while oil slumped.
Standard & Poor’s 500 Index futures declined 1.1 percent as of 11:11 a.m. in Tokyo, while the MSCI Asia Pacific Index (MXAP) slid 0.5 percent. The yen rose 0.2 percent and bond risk in Japan increased. South Korea’s won weakened against 14 of its 16 major counterparts. Oil lost 1.3 percent to $102 a barrel in New York, while copper declined in Shanghai.
The Nikkei 225 Stock Average lost 1.6 percent, poised for the lowest close since Feb. 21. Photographer: Tomohiro Ohsumi/Bloomberg
April 9 (Bloomberg) -- Kelvin Tay, chief investment strategist at UBS Wealth Management in Singapore, talks about Asian stock markets. He also discusses the U.S. economy and Federal Reserve monetary policy. He speaks with Susan Li on Bloomberg Television's "First Look." (Source: Bloomberg)
April 9 (Bloomberg) -- Kenji Abe, an equity strategist at Citigroup Global Markets Japan Inc., talks about the nation's financial markets and economy. Japan swung to a current-account surplus in February after a record deficit in January, lending support to a currency that officials have sought to weaken to spur the recovery of the world’s third-biggest economy. Abe speaks with Susan Li on Bloomberg Television's "First Up." (Source: Bloomberg)
April 9 (Bloomberg) -- Sandy Shen, a Shanghai-based analyst at research company Gartner Inc., talks about Asia's telecommunications industry. HTC Corp., Asia’s second-largest smartphone maker, posted its biggest drop in profit since listing a decade ago after sales declined amid competition from Apple Inc. and Samsung Electronics Co. Shen speaks with John Dawson on Bloomberg Television's "On the Move Asia." (Source: Bloomberg)
American employers added 120,000 jobs in March, the fewest in five months and less than the median economist forecast of 205,000 in a Bloomberg survey, the Labor Department reported on April 6. Stocks fell the most in South Korea, Taiwan and Japan on concern North Korea is preparing for a nuclear test and as data that showed China’s inflation accelerated more than forecast in March.
“The job data reduced investors’ optimism,” said Naoki Fujiwara, who helps oversee $6.4 billion at Shinkin Asset Management Co. in Tokyo. “People in the markets are getting more cautious and the mood is growing that the U.S. economy won’t recover so easily.”
U.S. Jobs Report
The U.S. jobs report presents a challenge that stocks have overcome nine times during the bull market that’s driven the S&P 500 up 107 percent in three years. The government’s monthly tally of U.S. hiring missed the median projection by 85,000, according to data compiled by Bloomberg. While the S&P 500 averaged losses of 0.8 percent in the day after shortfalls of this magnitude since March 2009, the benchmark gauge cut its decline in half a week later and was up 0.9 percent after two weeks, the data show.
Almost seven stocks fell for each that rose in the MSCI Asia Pacific Index. The Nikkei 225 Stock Average (NKY) lost 1.1 percent, poised for the lowest close in a month. South Korea’s Kospi index and Taiwan’s Taiex Index retreated 1.2 percent. European markets are shut today for a holiday, along with Australia, New Zealand, Hong Kong, Thailand and South Africa.
HTC Corp. (2498) tumbled 6.3 percent in Taiwan. Asia’s second- largest smartphone maker posted its biggest drop in profit since listing a decade ago after sales declined amid competition from Apple Inc. and Samsung Electronics Co.
Korean Defense Stocks
Victek Co., a South Korean maker of electronic warfare equipment, and Huneed Technologies, which makes military communication devices, rallied 15 percent. Satellite images show North Korea digging a new tunnel at a site where the country conducted nuclear tests in 2006 and 2009, Yonhap News reported yesterday, citing an unidentified intelligence official.
South Korea’s won slid 0.4 percent to 1,136.55 per dollar and government bonds gained after Joint Chief of Staff spokesman Lee Bung Woo said the military is “closely monitoring” North Korea’s planned rocket launch and preparation for a possible nuclear test. The five-year government bond yield fell four basis points to 3.65 percent.
“Reports that North Korea may launch a rocket near the end of this week is tilting market sentiment toward a weaker won,” said Ryoo Hyun Jung, a Seoul-based chief currency dealer at Citibank Korea Inc.
The Shanghai Composite Index (SHCOMP) slid 0.6 percent. China’s consumer prices rose 3.6 percent in March from a year earlier, the government said. That compared with the 3.4 percent median estimate in a Bloomberg News survey of economists and a 3.2 percent gain the previous month. The one-year swap rate rose four basis points to 3.185 percent.
“The CPI number is very high and disappointing,” said Ju Wang, a rates strategist at Barclays Capital in Singapore. “It’s bad for sentiment as it may delay a reserve requirement cut.” Barclays has predicted a reduction this month.
Yen Strengthens
The yen strengthened as official data showed Japan returned to a current-account surplus in February, bolstering the allure of the currency as an investment haven. The nation had a 1.18 trillion yen ($14.5 billion) surplus in its February current account, the widest measure of trade, government data showed today. That was after a record deficit in the account in January.
The cost of insuring Japanese corporate bonds from default increased, according to traders of credit-default swaps. The Markit iTraxx Japan index climbed 4.5 basis points to 162, according to Deutsche Bank AG. The benchmark is set for its highest close since March 22, according to CMA, which is owned by CME Group Inc. and compiles prices quoted by dealers in the privately negotiated market.
Oil futures slid as much as 1.4 percent in New York today after climbing 1.8 percent on April 5. Iran agreed to resume talks over its nuclear program, easing speculation that supplies could be disrupted. Copper on the Shanghai Futures Exchange fell as much as 0.8 percent.
Ten-year Treasuries were little changed after last week’s biggest rally this year, with yields at 2.06 percent.
To contact the reporters on this story: Lynn Thomasson in Hong Kong at lthomasson@bloomberg.net; Norie Kuboyama in Tokyo at nkuboyama@bloomberg.net
To contact the editor responsible for this story: Sandy Hendry at shendry@bloomberg.net
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