Asia stocks mixed with eyes on US economic recovery
Asian stocks were mixed Thursday as traders awaited more guidance on the U.S. economic recovery.
The Nikkei 225 in Tokyo closed 0.5% higher at 27,728.12. The Kospi in South Korea lost 0.1% to 3,277.94, while the Hang Seng in Hong Kong slipped 1% to 26,152.20 in afternoon trading.
The Shanghai Composite index fell 0.3% to 3,465.89. Sydney’s S&P;/ASX 200 gained 0.1% to 7,511.10. Shares tumbled in Singapore but rose in Malaysia and Indonesia.
Employment was in the spotlight. On Wednesday, payroll processor ADP revealed that the U.S. private sector added 330,000 jobs in July, which fell short of analysts’ expectations.
The U.S. Labor Department will release a more comprehensive jobs report on Friday. Economists are projecting that U.S. employers added 700,000 jobs in July, bringing the national unemployment rate down to 5.7% from 5.9%, according to FactSet.
The ADP report “missed expectations by a wide margin,” Yeap Jun Rong of IG said.
“Although there has been no clear correlation between the ADP data and the non-farm payrolls, the slowdown in hiring in the leisure and hospitality sectors seems to draw some concerns on the rise in virus cases in July bringing about some impact,” he said.
Concerns have been mounting around the coronavirus delta variant’s spread in the U.S., Europe and Asia, and particularly in China, which is on high alert as it confronts hundreds of fresh cases.
China has sealed off residential communities, suspended flights and trains, and ordered mass coronavirus testing in Wuhan, the city where the disease was first detected in late 2019. Although China’s numbers are small compared to outbreaks elsewhere, its containment strategies and the subsequent impact on its large economy are being closely watched.
The disappointing jobs data weighed on Wall Street. The S&P; 500 index gave up 0.5% to 4,402.66 on Wednesday, easing back from an all-time high it set a day earlier.
The Dow Jones Industrial Average dropped 0.9% to 34,792.67. The Nasdaq composite added 0.1% to 14,780.53, however. Both the Dow and Nasdaq hit all-time highs last week.
Strong earnings reports were not enough to lift stocks for many companies. General Motors fell 8.9%, despite beating analysts’ profit expectations and raising its forecast. CVS Health lost 2.9% after reporting solid results.
Online broker Robinhood, which made its market debut last week, surged 50.4%. Market experts cautioned that the stock could be in for a jagged ride because of its popularity among smaller investors.
In energy markets, benchmark U.S. crude lost 13 cents to $68.02 per barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the price basis for international oils, gave up 28 cents to $70.10 per barrel in London.
The U.S. dollar rose to 109.74 Japanese yen from 109.47 yen on Wednesday. The euro retreated to $1.1832 from $1.1843.