World stocks mixed amid dour economic signals
Tuesday, September 6, 2011
BANGKOK (AP) — Asian stocks fell but Europe regained its balance Tuesday after several tumultuous sessions of trading sparked by the bleak U.S. jobs picture. Swiss shares soared after the country’s central bank moved to control the strong franc.
Oil slid below $84 a barrel amid expectations that continued weakness in developed economies will crimp demand for crude. The dollar gained against the euro but was lower against the yen.
European shares headed higher in early trading after a steep sell-off Monday. Britain’s FTSE 100 rose 1.2 percent to 5,169.63. Germany’s DAX was 1 percent higher at 5,299.08 and France’s CAC-40 added 1 percent to 3,029.50.
Switzerland’s benchmark climbed 4 percent after the Swiss National Bank announced it had fixed the country’s exchange rate at 1.20 francs per euro to stem the franc’s export-sapping strength.
Wall Street, which was closed Monday due to the Labor Day holiday, was bracing for losses. Dow futures were down 1.6 percent at 11,028 and broader S&P 500 futures fell 1.8 percent to 1,147.80.
Asian shares faced broad-based declines earlier in the day. Japan’s Nikkei 225 index dropped 2.2 percent to close at 8,590.57 with shares of the country’s powerhouse export sector skidding amid fears of another U.S. recession. Toshiba Corp. plunged 5.1 percent and Panasonic Corp. lost 3.4 percent.
But utility shares bucked the losing trend, following remarks by Industry Minister Yoshio Hachiro in favor of resuming operations of idled nuclear reactors as soon as possible. Kansai Electric Power rose 3.5 percent, while Tokyo Electric Power was 1.3 percent higher.
Australia’s S&P/ASX 200 shed 1.6 percent to 4,075.50 and South Korea’s Kospi fell 1.1 percent at 1,766.71. Mainland Chinese shares lost further ground with the Shanghai’s benchmark Composite Index slipping to nearly a 14-month low, down 0.3 percent at 2,470.52. The Shenzhen Composite Index lost 1.1 percent to 1,085.35.
Worries over the impact of the Chinese government’s credit tightening policies pulled shares in cement, food and beverage companies lower.
Hong Kong’s Hang Seng registered a modest gain of 0.5 percent to 19,710.50. Benchmarks in India, Thailand and Indonesia also rose.
Gold shares were among the gainers Tuesday, as prices for the precious metal hovered near record highs. Hong Kong-listed Zijin Mining Group, China’s largest gold miner, rose 2.3 percent. Newcrest Mining Ltd., Australia’s No. 1 gold miner, rose 0.9 percent.
The declines in Asia come a day after European shares suffered sharp losses: Germany’s DAX tumbled 5.3 percent while the CAC-40 in Paris dived 4.7 percent.
Worrisome U.S. employment figures and the possible spread of Europe’s sovereign debt crisis from small economies like Greece to major ones like Italy are stoking investor fears. Greece, Ireland and Portugal have already needed to be rescued with loans from the IMF and Europe, but Italy is regarded as too large to bail out.
“People are worrying about the U.S. economy and the worsening situation in Europe, especially Italy and Spain,” said Jackson Wong, vice president of Tanrich Securities in Hong Kong. “There are very big concerns in the market that they might not contain the situation in the short term.”
A wave of negative sentiment was unleashed Friday, when a government report said the U.S. economy failed to add any new jobs in August. That caused European and Asian stock markets to sink sharply Monday.
The August jobs figure was far below economists’ already tepid expectations for 93,000 new U.S. jobs and renewed concerns that the U.S. recovery is not only slowing but actually going into reverse.
U.S. hiring figures for June and July were also revised lower, adding to the gloom. The unemployment crisis has prompted President Barack Obama to schedule a major speech Thursday night to propose steps to stimulate hiring.
Benchmark oil for October delivery was down $1.91 to $84.53 in electronic trading on the New York Mercantile Exchange. Crude last settled at $86.45 on Friday because U.S. markets were closed Monday for the holiday.
In London, Brent crude for October delivery was up 97 cents at $111.05 on the ICE Futures exchange.
In currencies, the euro slipped to $1.4185 from $1.4187 in New York late Friday. The dollar rose to 77.33 yen from 76.87 yen.
AP researcher Fu Ting contributed from Shanghai.