Investors were fretting to hold riskier assets ahead of closely watched U.S. jobs data for August, due later Friday. The data is expected to give more clues as to whether the Federal Reserve may raise interest rates later this month or wait longer to act.
A strong jobs number could rekindle speculation of an interest rate hike in the U.S. as soon as this month, which could hurt risk assets, particularly in emerging markets.
Federal Reserve officials, meanwhile, have indicated that a rate increase remains on the table, although the recent market tumult has raised doubts about the exact timing of a move.
Investors were also keeping eyes on how Shanghai stocks will reopen Monday after China's two-day holiday. Chinese markets were closed on Thursday and Friday, as China commemorates the 70th anniversary of the end of World War-II.
In recent weeks, concerns about China have fueled big swings in stock markets and spurred many investors to exit bets on other relatively risky assets.
Among Asian bourses
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Nikkei tanks 2.15%
The Japanese share market tumbled to finish at its lowest level since August 26, today, dragged down by yen appreciation against the major currency baskets and on caution ahead of a US jobs market report later in the global which likely to shape the Federal Reserve's interest rate decision. Total 32 out of 33 TSE sectors ended down, with Glass & Ceramics Products, Insurance, Information & Communication, Chemicals, Electric Appliances, Real Estate, and Services being major drag of the day. The Nikkei Stock Average tumbled 390.23 points, or 2.15%, to end at 17792.16 points. The broader Topix index dropped 2.06%, or 30.45 points, to 1444.53 at the close in Tokyo.
Export-oriented stocks tumbled into the red as the yen, regarded as a haven in times of volatility, appreciated 0.7% to 119.29 per greenback. It has climbed 2% versus the dollar this week. Panasonic Corp lost 4% to Y1222, while Toyota Motor sank 2.5% to Y7004, Sony Corp 2% to Y2966 and Toshiba Corp 3% to Y347.
SoftBank Group Corp sold off 4.1% to Y6424 after Barclays downgraded its rating for the stock to 'underweight' from 'overweight,' and lowered its target price for the stock to 7,500 yen from a previous target of 8,400 yen.
NGK Insulators fell 4.6% at Y2,494 after the U.S. Justice Department said the Japanese automotive parts supplier has agreed to pay a $65.3 million criminal fine. The department said that NGK Insulators conspired to fix prices and rig bids for ceramic substrates for automotive catalytic converters supplied to auto makers.
Foreign investors last week sold a net Y1.47 trillion ($12 billion) of Japanese stocks and futures contracts for the Nikkei and Topix, the biggest combined net selling since 2007, according to Japan Exchange Group data released on Thursday. The selling was driven by futures trading.
Bargain hunting spurs Australia market
The Australian share market closed edge above the neutral line after spending the day sliding between higher and lower. Eight out of ten ASX sectors were stronger, with technology, utilities, telecom, and material issues being major gainers. The benchmark S&P/ASX 200 index advanced 2.80 points, or 0.25%, to 5040.60 points. The broader All Ordinaries index closed 12.10 points, or 0.24%, up at 5060.80.
The gain in the Sydney bourses came as a Chinese holiday gave the market a break from bad news and some traders covered their short positions. Sentiments were also buoyed by as European Central Bank chief Mario Draghi left the door open for further stimulus.
Remarks by ECB President Mario Draghi reinvigorated the belief that monetary policies in Europe and the U.S. were on diverging tracks. The ECB revised down growth and inflation forecasts for the eurozone, and Mr. Draghi signaled the central bank was ready to take steps, if warranted, to rouse the region's dour economic fortunes. Federal Reserve officials, meanwhile, have indicated that a rate increase remains on the table, although the recent market tumult has raised doubts about the exact timing of a move.
Financial stocks were down, with three out of four lenders being major losers. Banks stocks were under pressure as investors have fretted about regulatory calls to hold additional capital and a rise in bad debts as the wider economy cools. Westpac Bank led losses among major banks, down 0.8% to A$29.94, meanwhile National Australia Bank fell 0.4% to A$29.80 and Australia & New Zealand Banking Group dropped 0.4% to A$26.86. Commonwealth Bank was, however, up 0.3% to A$72.15.
Myer gained 2.78% to A$0.925 after yesterday falling out of a trading halt following a capital raising.
Mesoblast, the Australian biotech working on treatments for inflammatory ailments, cardiovascular disease and back pain, said a stem cell regenerative medicine has been recommended for use in Japan. Its shares closed up 7.7% to $3.34.
Hong Kong market ends softer
Hong Kong stock market ended down in volatile trade yet quite trade, following losses in the global markets yesterday and further weakness in the Asian market today. Investors cut exposure to riskier assets on concern that China may reduce support for its stock market and on caution before U.S. payrolls data on Friday. The Hang Seng Index ended down by 94.33 points, or 0.45%, at 20840.61 points. The Hang Seng China Enterprises Index, benchmark measure of performance of mainland China enterprises, sank 131.73 points, or 1.42%, to 9169.59 points. Turnover reduced to HK$69.3 billion from HK$96.1 billion on Wednesday. Hong Kong markets were closed on Thursday, as China commemorates the 70th anniversary of the end of World War-II.
Shares of energy companies declined, with PetroChina (00857) slipping 3.6% to HK$5.81, while Sinopec (00386) slid 3.4% to HK$4.81 and CNOOC (00883) softened 0.5% to HK$8.8.
UBS Research sees high likelihood of a merger between Power Assets (00006) and CKI Holdings (01038). Hence, it upgraded its ratings for both firms to "buy" with respective target prices of HK$71 and HK$80. Power Assets rose 2% to HK$66.25 and CKI Holdings added 1% to HK$63.9.
China Merchants (00144) gained 3% on hopes of reorganisation. Sinotrans Ship (00368) soared 6% to HK$1.55. Sinotrans (00598) surged 11% to HK$3.65.
The Nikkei Hong Kong purchasing managers' index (PMI) fell to a six-year low of 44.4 in August, from 48.2 in July, underscoring a slowdown in the city's private sector economy. The latest PMI figure also marked a contraction for the sixth consecutive month.
Sensex, Nifty tumbles more than 2% each
Stocks from banking, metal and power sector led losses as key benchmark indices tumbled. The barometer index, the S&P BSE Sensex, lost by 558.76 points, or 2.17%, to 25,206.02, as per provisional closing data. The 50-unit CNX Nifty slumped 167.95 points or 2.15% at 7,655.05, as per provisional closing data. The Sensex hit its lowest level in more than 13 months while he Nifty hit its lowest level in more than a year.
Bank stocks fell after a credit rating agency said in a research note that the Reserve Bank of India's (RBI) draft guidelines on computation of base rate, if implemented in its current form, will adversely impact profitability of Indian banks.
In sector trends, shares of power generation and power distribution firms tumbled. Tata Power (down 5.18%), Reliance Power (down 5.06%), Adani Power (down 4.33%), JSW Energy (down 4.47%), Reliance Infrastructure (down 4.59%), Torrent Power (down 3.84%), NTPC (down 2.89%), NHPC (down 1.52%), GVK Power & Infrastructure (down 0.86%) and Power Grid Corporation of India (down 3.17%) edged lower.
Elsewhere in the Asia Pacific region: Taiwan's Taiex index fell 1.2% to 8000.60. South Korea's KOPSI fell 1.5% to 1886.04. New Zealand's NZX50 fell 0.4% to 5546.88. Singapore's Straits Times index slipped 1.5% at 2863.81. Indonesia's Jakarta Composite index dropped 0.4% to 4415.34. Malaysia's KLCI sank 0.9% to 1589.16. China market closed for holiday
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