The report compiled by Automatic Data Processing Inc (ADP) and Moody's Analytics showed that private-sector jobs in the US companies increased by 215,000 jobs in November, higher than the market expectation, while October's figures were revised upwards to 184,000 from 130,000 reported a month ago..
Market turnover was down from prior day as investors cautiously awaiting sideline ahead of the announcement of highly anticipated US employment figures due on Friday as that could provide clues about when the Federal Reserve will reduce its stimulus program. Investors are now worried that stronger-than-expected U.S. jobs data could lead to a December start of scaling back of Federal Reserve's monetary easing scheme.
The Federal Open Market Committee (FOMC) holds a two-day policy meeting on interest rates in the United States on 17-18 December 2013. The US central bank currently buys bonds worth $85 billion a month in a bid to hold interest rates low and encourage economic growth in the world's biggest economy. Fed's bond-buying program has been a source of liquidity for most Asian and emerging markets this year. Minutes of the Fed's October meeting released on 20 November 2013 showed officials may reduce their $85 billion a month of bond buying if the economy improves as anticipated.
The Fed's stimulus has shored up global stock markets over the past few years. So-called "tapering" of that stimulus could work the opposite way, even though it would be predicated on an improving U.S. economic outlook, may result heavy sell off in global markets.
Among Asian bourses, shares in the Japanese financial market extended its losses from yesterday onward, with the benchmark Nikkei Stock Average down by 230.45 points to 15177.49, pressured by appreciation in the country's currency and by losses on Wall Street overnight on concerns about tapering of monetary stimulus.
Heavily weighted shares in the Tokyo took a hit as traders continued to cut back their positions before the release of the U.S. jobs data, with Fast Retailing Co. dropping 3.1% to Y37,000 and Fanuc Corp. retreating 1.9% to Y16,360.
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Exporters weakened as the dollar fell, though it still managed to stay above Y102. The dollar was changing hands at Y101.99 late afternoon today, compared with the previous day's close at Y102.52.
Kyocera Corp. lost 2.3% to Y5,140 while Toyota Motor Corp. declined 1.0% to Y6,220. Shares of mini-vehicle makers declined following a report stating the government will raise the ownership tax for these vehicles by October 2015 to more closely match the tax level on regular cars. Suzuki Motor lost 1.9% to Y2,543 and Daihatsu Motor fell 2.1% to Y1,798.
Nippon Telegraph & Telephone gained 1.0% to Y5,160 after the Nikkei reported that the Japanese government will sell part of its shareholding to fund a stimulus package. The government plans to generate Y100 billion from the sale and NTT plans to buy back the shares, according to the newspaper.
Japanese Prime Minister Shinzo Abe's cabinet approved a $182 billion economic package on Thursday to pull the economy out of deflation, but doubts remain about the economic impact. The package has a headline value of 18.6 trillion yen, which is an exaggerated figure as the bulk of the package includes loans from government-backed lenders and spending by local governments that was already scheduled. The core of the package is 5.5 trillion yen in spending measures Abe ordered in October to bolster the economy ahead of a national sales-tax hike in April, and the government does not have to sell new debt to fund this spending. The measures approved on Thursday will add 1 percentage point to gross domestic product and create around 250,000 jobs, according to the Cabinet Office. The steps approved on Thursday include measures to boost competitiveness; assist women, youth and the elderly; accelerate reconstruction from the March 2011 earthquake and tsunami; and build infrastructure for the 2020 Tokyo Olympics.
In Australia, shares in the Australian financial market tumbled to lowest level in seven weeks, with the benchmark S&P/ASX 200 index down by 75.80 points to finish at 5198.
The steep decline in the Australian market washed out about A$20 billion in value, pressured by a drop in the country's currency to a three-month low below 90 U.S. cents, and amid growing worries the US Federal Reserve might start reducing its stimulus as early as this month.
Australian major banks and financials were worst performer today. Commonwealth Bank fell 1.7% to A$75.50, Westpac Banking Corp 2.7% at A$31.49, Australia & New Zealand Banking Group 1.8% to A$31.19 and National Australia Bank 2.1% to A$33.66.
Qantas Airways shares tanked 11.20% to A$1.07 after the company warned it expects to post an underlying loss before tax of $250 million to $300 million for the six months ending Dec. 31. The carrier said trading conditions saw a marked deterioration, particularly in November with both passenger loads and yields below the already negative trends for the year to date.
Australian dollar declined from yesterday closure against greenback and other major currencies on Thursday as investors continue to react to disappointing third-quarter growth figures. The downbeat GDP data release is likely to induce the RBA to maintain its dovish stance and raises the possibility of further rate cuts going ahead. The Australian dollar also weakened after new figures released today showed Australia's trade deficit almost doubled in October. The local currency was buying 90.44 US cents in late trade. The Australian dollar also weakened against the British pound sterling and the euro, buying 55.22 pence and 66.58 euro cents in late trade.
In China, benchmark indices of the China financial market finished weaker in narrow and quite trade. The Shanghai Composite dropped 4.70 points to finish at 2247.06, while the CSI 300 Index fell 6.94 points to 2468.20.
Shares of telecom companies declined the most in Shanghai as profit taking on speculation strong gains in previous two sessions were excessive as compared to their valuation. ZTE fell 6% to 15.81 yuan. Fiberhome Telecommunication Technologies Co. lost 3.7% to 16.97 yuan.
Leshi Internet Information & Technology (Beijing) Co. dropped 8.7% to 32.48 yuan after the government announced plans to resume share offerings.
BesTV New Media Co. rose 0.5% to 37.83 yuan after it signed an agreement with Walt Disney Co. to form a joint venture in China.
In Hong Kong, shares in the HK market were mostly lower, joining broader losses throughout Asian markets, as investors continued reducing riskier position on caution before the announcement of highly anticipated US employment figures due on Friday. The benchmark Hang Seng Index was provisionally down 16.13 points to 23712.57 while the Hang Seng China Enterprises Index grew 26.96 points to 11395.74.
Among the HK 50 blue chips, 13 stocks rose and 31 fell, with six stocks remaining steady. Sands China (01928) gained 2.1% to HK$61.65, while Galaxy (00027) also gained 1.6% to HK$63.35, making themselves the biggest blue-chip gainers.
Shares of Hong Kong financial companies declined, with Standard Chartered Plc falling 4.7% to HK$174 in the wake of the bank's warning that 2013 income will be broadly flat from 2012. Shares of HSBC Holdings Plc sagged 1.5% to HK$84.15.
Meanwhile, China Mobile shares rose 0.7% to HK$84.70 on report that the mobile-phone company has signed a deal with Apple Inc. to offer iPhones on its network.
In India, Indian benchmark indices edged higher as exit polls on Wednesday, 4 December 2013, predicted a strong showing for the Bharatiya Janata Party (BJP) in the recently concluded assembly elections in four states viz. Rajasthan, Madhya Pradesh, Chhattisgarh and New Delhi. But, the key benchmark indices trimmed a portion of the initial strong gains before finishing the session. The Sensex was provisionally up 240.08 points or 1.16%, off close to 215 points from the day's high and up close to 20 points from the day's low.
From 30-share Sensex pack, 19 stocks rose and rest fell. Maruti Suzuki India (up 3.52%), Coal India (up 2.65%), and Tata Steel (up 1.76%) edged higher from the Sensex pack. Index heavyweight and cigarette maker ITC shed 1.1% at Rs 309.80. Another index heavyweight Reliance Industries (RIL) gained 1.37%.
Bank shares were in demand after a foreign brokerage upgraded target prices of select bank shares. Kotak Mahindra Bank (up 1.67%), ICICI Bank (up 6.74%), Yes Bank (up 6.04%), HDFC Bank (up 4.45%), Union Bank of India (up 3.85%), Bank of Baroda (up 3.48%), Canara Bank (up 5.6%), IndusInd Bank (up 3.33%), Bank of India (up 2.05%), Punjab National Bank (up 1.9%), State Bank of India (up 1.59%), and Federal Bank (up 0.64%), edged higher.
The brokerage increased Bank of Baroda's target price to Rs 775 from Rs 645 and for Kotak Mahindra Bank, the target was raised to Rs 790 from Rs 762. SBI's target price was increased to Rs 2,200 from Rs 1,933. ICICI Bank's target price was raised to Rs 1,290 from Rs 1,250.
AXIS Bank rose 4.23% to Rs 1240. In its clarification to a news report that the private sector bank has initiated discussions for selling its network of credit and debit card swipe machines business, AXIS Bank today, 5 December 2013, said that the bank evaluates opportunities for various strategic initiatives on an ongoing basis. As and when any of these discussions fructify, the bank will make suitable announcements to the stock exchanges, it said. The news report said that three global payment processing giants, Global Payments, WorldPay and Total System Services (TSYS), are bidding for AXIS Bank's network of more than two lakh credit and debit card swipe machines business valued at Rs 1200 crore.
Elsewhere in the region, New Zealand's NZX50 index fell 0.3%. Indonesia's Jakarta Composite index sank 0.58%. South Korea's KOSPI fell 0.1%. Taiwan's Taiex index rose 0.5%. Singapore's Straits Times index fell 1.15%. Malaysia's KLSE Composite rose 0.16%.
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