Asian stocks outside Japan dropped, with the regional gauge on course for the longest losing streak in almost five months, amid global economic growth concerns.
The MSCI Asia Pacific excluding Japan Index slid 0.3% to 406.11 as of 4:10pm in Hong Kong, the lowest level since April 8. A report Wednesday showed US companies hired fewer workers last month than estimated, signaling employment gains may have slowed and adding to anxiety over growth. The data came ahead of Friday’s monthly government payrolls report on US jobs. Hong Kong property developers sank after Goldman Sachs Group Inc. forecast a slide in home prices. Equity markets in Japan, South Korea, Thailand, and Indonesia are closed for holidays.
“The overall sentiment is disbelief,” Michael McCarthy, chief market strategist at CMC Markets Asia Pacific Ltd., said by phone. “Investors are struggling to reconcile valuations with the risks. It’s going to remain a difficult environment.”
Global equities have fallen to their lowest level in almost a month amid concern over weak company earnings and lackluster data on manufacturing and employment. Federal Reserve Bank chiefs of Atlanta and San Francisco have highlighted the prospect of an interest-rate increase next month, with Friday’s US payrolls data seen as key to investors’ assessment of the next moves in monetary policy.
Stan Druckenmiller, the billionaire investor with one of the best long-term track records in money management, said the bull market in stocks has “exhausted itself” and that gold is his largest currency allocation. He averaged annual returns of 30% from 1986 through 2010 at his Duquesne Capital Management.
Hong Kong’s Hang Seng Index lost 0.4% and the Hang Seng China Enterprises Index of mainland firms listed in the city fell 0.8 percent amid concern a pick up in economic growth is faltering. A private index of China’s services industry fell to 51.8 in April from 52.2 in March, Caixin Media and Markit Economics said on Thursday.
New World Development Co. led a slump for developers after Goldman Sachs downgraded Hong Kong property stocks, predicting a 20% drop in home prices. The Shanghai Composite Index climbed 0.2%.
Australia’s S&P/ASX 200 Index rose 0.2%. National Australia Bank Ltd climbed 2% in Sydney after posting a 6.5% increase in first-half cash profit as it bucked a trend among Australia’s largest lenders by decreasing bad-debt charges and as margins improved for the first time since 2011.
Philip Lowe will replace Glenn Stevens as governor of the Reserve Bank of Australia for a seven-year term on Sept 18. Lowe inherits the post with diminished interest rate ammunition after the central bank eased policy to a record low to cushion the end of a mining investment boom and combat disinflation.
Crown Resorts Ltd, the gaming company of James Packer, rose 4.9%% in Sydney after selling $800 million worth of shares in its Macau venture, raising speculation the billionaire is increasing his firepower for a potential purchase of Australian casino assets. The sale was at a 6 percent premium, Deutsche Bank analyst Mark Wilson wrote in a report.
New Zealand’s S&P/NZX 50 Index added 0.8%%. Singapore’s Straits Times Index fell 0.6%. Taiwan’s Taiex index dropped 0.2%. The Philippine Composite Index retreated 1.2% before Monday’s presidential elections. The FTSE Bursa Malaysia KLCI Index dropped 0.7%. Futures on the S&P 500 Index gained 0.4% after the underlying gauge fell 0.6% Wednesday.
Reference: Bangkok Post and Bloomberg, May 5, 2016