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US, Europe results send Asian markets lower

May 03, 2012


“A risk-off tone has developed in the wake of disappointing economic data,”said Mitul Kotecha, strategist at Credit Agricole. - File photo

HONG KONG: Asian markets slipped on Thursday following more weak jobs data from the United States and Europe as well as figures showing eurozone manufacturing falling for a ninth straight month.

The downbeat outlook saw traders shift to safer assets, which weighed on the euro and Australian dollar.

Sydney fell 0.16 per cent, or 6.9 points, to 4,429.0, Seoul fell 0.20 per cent, or 3.94 points, to 1,995.13, while in the afternoon Hong Kong was down 0.46 per cent and Shanghai was 0.17 per cent off.

Tokyo was closed for a public holiday.

US payrolls firm ADP reported Wednesday that just 119,000 private sector jobs were created in April, well off the forecast 170,000, signalling the recent surge in employment could be tailing off.

ADP also revised down March's figure of 209,000 to 201,000.

The results added to the grim reading from Europe earlier in the day, where research group Eurostat said unemployment hit a record 10.9 per cent in March -- which includes a 24.1 per cent rate in Spain alone.

Adding to the gloom in the eurozone was news that manufacturing in the region continued to taper as nations tighten their belts with austere budget cuts as part of a drive to cut their huge public deficits.

A survey by Markit showed the Purchasing Managers Index of manufacturing activity hit 45.9 in April from 47.7 in March, its lowest for three years and the ninth month in a row it has fallen.

A reading below 50 indicates contraction.

“A risk-off tone has developed in the wake of disappointing economic data,”said Mitul Kotecha, strategist at Credit Agricole, in a note according to Dow

Jones Newswires.

“While hitting equities, the weaker market tone is likely to keep the US dollar buoyed.”The euro slipped to $1.3143 in early Asian trade from $1.3158 late Wednesday in New York, and to 105.40 yen from 105.56. The dollar was fetching 80.19 yen, from 80.14 yen.

And the Australian dollar fell to US$1.0302, from US$1.0337.

On Wall Street the Dow ended flat, the Standard & Poor's 500 fell 0.25 per cent and the Nasdaq picked up 0.31 per cent.

Eyes are now on a European Central Bank policy meeting later in the day for clues to its next course of action to boost the sagging economy, while crucial non-farm jobs figures will be released in the United States on Friday.

Oil was mixed with New York's main contract, West Texas Intermediate crude for delivery in June, down 11 cents at $105.11 per barrel while Brent North Sea crude for June gained nine cents to $118.22 29.

Gold was at $1,647.01 an ounce at 0620 GMT, compared with $1,650.70 late Wednesday.

In other markets:

-- Taipei ended 0.23 percent lower, giving up 17.28 points to 7,659.53.

Taiwan Semiconductor Manufacturing Co was 0.57 per cent higher at Tw$88.9 while Hon Hai Precision edged up 0.45 per cent to Tw$90.0.

-- Wellington fell 1.06 per cent, or 38.27 points, to 3,576.70.

Contact Energy fell 1.82 per cent to NZ$4.85, Fletcher Building shed 2.14 per cent to NZ$6.39 and Telecom was 2.27 per cent off at NZ$2.59.