Friday, April 05, 2013 12:42 pm
World stocks fall on weak US jobs data
By TOBY STERLINGAP Business Writer
Japan's Nikkei stock index was a notable standout, hitting a four-year high when it closed earlier as investors cheered the central bank's new policies.
In other regions, attention was focused on the U.S. data, which showed an increase of only 88,000 jobs in March, far below the expected rise of about 195,000. Although the unemployment rate fell to 7.6 percent from 7.7 percent, that was only because more people gave up looking for work.
Analysts said the figures showed the U.S. recovery, which had been advancing at a good pace in recent months, would be uneven. They suggested it would be only a temporary slowdown, however.
"We don't anticipate the slowdown becoming too severe, not when the housing recovery is firing on all cylinders, but it is a reminder that the US is still unable to sustain what used to be just average rates of growth," said Paul Ashworth, chief U.S. economist at Capital Economics.
Britain's FTSE 100 ended Friday 1.41 percent lower at to 6,254 while Germany's DAX dropped 2 percent to 7,658. France's CAC 40 index lost 1.7 percent to 3,663.
The jobs data sent Wall Street lower, with the Dow shedding 0.75 percent to 14,497 and the broader S&P 500 down by 0.9 percent to 1,546.
Earlier, the attention in markets had been on Japan, where the Nikkei surged for a second straight day after the central bank's new governor, Haruhiko Kuroda, unveiled plans to pump huge amounts of money into the financial system to spur price rises, spending and borrowing in an economy that has stagnated for years.
The central bank said it wanted to double the money supply and achieve a 2 percent inflation target within about two years. Kuroda described the scale of monetary stimulus as "large beyond reason," but said the inflation target would remain out of reach if the central bank stuck to incremental steps.
"The size of monetary easing announced yesterday far exceeded expectations," said analysts at DBS Bank Ltd. in Singapore in a commentary.
The Nikkei 225 in Tokyo closed 1.6 percent higher at 12,833.64, its highest finish since Sept. 1, 2008. Earlier in the day it surged more than 3 percent, breaking the 13,000 level.
Stock markets in Asia outside of Japan sagged, however.
Hong Kong's Hang Seng tumbled 2.7 percent to 21,726.90. Analysts said the fall reflected some nervousness about a recent outbreak of deadly bird flu in China. Six people have died and authorities have ordered the slaughter of all poultry at a Shanghai market where the virus was detected. The news hurt tourism and travel-related shares. Hong Kong-listed Air China plunged 9.8 percent and China Southern Airlines sank 8.5 percent.
South Korea's Kospi dropped 1.6 percent to 1,927.23, dragged down by political jitters over the latest tensions with Pyongyang. Australia's S&P/ASX 200 lost 0.5 percent to 4,891.40 as investors took profits after recent rallies
In Japan, the monetary easing measures pushed the yen sharply lower. On Friday, the dollar was up to 97.09 yen from 96.13 yen late Thursday.
Mark Williams, chief Asia economist at Capital Economics, said that the Bank of Japan's credibility rests on the success of the new direction the bank is taking.
"Markets are giving it the benefit of the doubt for now. But if the broad monetary aggregates and inflation don't show signs of a shift, the new-found trust in the capacities of the BoJ will rapidly fade," Williams said in a written commentary.
Benchmark oil for May delivery was down 67 cents to $92.59 per barrel in electronic trading on the New York Mercantile Exchange. The contract fell $1.19 on Thursday.
The euro rose against the dollar, to $1.3017 from $1.2939 late Thursday in New York.
AP Business Writer Pamela Sampson contributed from Bangkok