Asian stocks fell for a third day on Friday, following weak leads from overseas markets, after European Central Bank president Mario Draghi failed to deliver new stimulus measures to help fix Europe's debt crisis.
Draghi announced no immediate or concrete measures such as bond purchases of struggling peripheral nations to curb the region's debt crisis, but promised to take action in the near future, if support was requested. ECB action came after the Fed held off on offering new monetary stimulus on Wednesday.
Investors are now bracing for the U.S. jobs data due later in the global day, with many analysts expecting payrolls in the United States to have jumped by roughly 100,000 in July following a weaker than expected increase of 80,000 jobs in June. The unemployment rate is expected to remain unchanged at 8.2 percent.
Commodities rose and the euro clawed back earlier losses against the dollar ahead of the crucial non-farm payrolls data tonight that would set the stage for any new initiatives from the Fed. The Fed has room for further easing if the economic outlook deteriorates, the International Monetary Fund said in a report released yesterday.
Tokyo stocks fell sharply after the Fed and the ECB refrained from unveiling new stimulus measures. The Nikkei average ended down 98 points or 1.1 percent at 8,555 after briefly falling over 130 points early in the session. The broader Topix index fell 1.2 percent. Tech shares came under selling pressure as the yen remained strong following ECB inaction to the region's debt crisis.
Shares of Sharp plummeted 28 percent on heavy volume after it announced a 94 billion yen operating loss for the June quarter and unveiled plans to cut thousands of jobs for the first time in more than five decades. Sony also tumbled 7 percent after the firm slashed its forecast for 2012/13 operating profit. Panasonic slumped 3.8 percent and Toshiba retreated 3.4 percent.
Fuji Heavy Industries declined 2.6 percent after announcing a worse-than-expected fiscal year profit outlook. Heavyweight Fast Retailing bucked the downward trend to end up about 3 percent despite reporting a 3 percent year-over-year decline in its domestic July Uniqlo same-store sales.
China' Shanghai Composite index added a percent after a private-sector survey showed China's services sector expanded in July at a healthy pace, recovering from June's 10-month low. The China HSBC services purchasing managers index (PMI) rose to 53.1 in July from 52.3 in June.
However, in contrast to the report from Markit Economics, the latest survey by the China Federation of Logistics and Purchasing showed easing growth in July as inflow of new orders weakened. The seasonally adjusted purchasing managers' index for the services sector fell to 55.6 in July from 56.7 in the previous month.
Hong Kong's Hang Seng index edged down 0.1 percent, with strength in mainland Chinese stocks helping limit the downside.
Australian shares fell sharply, dragged down by miners, after the ECB failed to offer any immediate monetary stimulus to help ease concerns over Europe's debt crisis. Both the benchmark S&P/ASX 200 and the broader All Ordinaries index fell about 1.1 percent each. BHP Billiton tumbled 2.3 percent after taking a $2.84 billion writedown on the value of its United States shale and Australian nickel assets. Rio Tinto and smaller rival Fortescue slumped about 4.4 percent each, while gold miner Newcrest retreated 1.9 percent.
Financial stocks also lost ground amid news that the nation's banks are now worth more than the country's mining giants for the first time since the global financial crisis. ANZ, NAB, Westpac and Commonwealth fell between 0.7 percent and 1.1 percent, while investment bank Macquarie Group eased 0.6 percent and insurer QBE slid 0.2 percent.
In economic news, activity in the Australian services sector continued to contract in July, highlighting the fragility of business conditions, a report from the Australian Industry Group revealed. The AIG/Commonwealth Bank Performance of Services index fell to 46.5 from the June reading of 48.8.
South Korea's Kospi average fell 1.1 percent after Spanish and Italian bond yields surged due to the disappointment over ECB inaction. Heavyweight tech shares, banks and automakers led the declines, as overseas investors turned net sellers after a five-day buying streak.
Samsung Electronics fell 1.6 percent, while LG Electronics jumped over 5 percent after the company saw its ranking climbing one notch to fourth place in the smartphone market. Brokerages tumbled on disappointing second-quarter earnings and amid continued concerns about the European debt crisis, while automakers Hyundai Motor and its affiliate Kia Motors fell 2-3 percent on reporting weak monthly global sales.
New Zealand shares fell modestly, weighed down by weak regional cues following the ECB disappointment. The benchmark NZX-50 index ended half a percent lower, with heavyweight Telecom drifting lower after it lost an appeal to overturn a record $12 million fine for breach of competition law through the misuse of its market power. Shares of the phone company slid 0.7 percent. Utility Contact Energy declined 1.4 percent and rural services firm PGG Wrightson tumbled 3.1 percent.
Shares of NZX retreated 1.7 percent after the exchange regular reported a 13 percent fall in trading value last month, continuing a trend of recent months. Among the prominent gainers, Fisher & Paykel Healthcare added a percent after rival Resmed Inc posted record revenues and income for the June quarter 2012. Heartland New Zealand, the would-be bank, closed up 1.9 percent and carpet maker Cavalier rose 1.3 percent.
Elsewhere, India's benchmark Sensex was down 0.2 percent and the Taiwan Weighted average slid 0.7 percent, while Indonesia's Jakarta Composite index was up 0.2 percent, Malaysia's KLSE Composite edged up marginally and Singapore's Straits Times rose half a percent.
On Wall Street, stocks fell for a fourth day overnight following the ECB disappointment. The ECB decided to leave interest rates unchanged and hinted that it "may undertake outright open market operations," but traders seemed disappointed that there was not more conviction behind Central Bank President Mario Draghi's remarks.
As a result of the focus on Europe, traders largely shrugged off a report from the Labor Department showing a smaller than expected increase in weekly jobless claims. The Dow and the S&P 500 dropped about 0.7 percent each, while the tech-heavy Nasdaq slid 0.4 percent.
by RTT Staff Writer
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