Asia stocks mixed ahead of European rate decisions
Asian markets were mixed Thursday as investors waited for key interest rate decisions in Europe later in the day and braced for more bad news from Friday's U.S. jobs report. Oil prices fell to fresh three-year lows, AP reported.
Japan's Nikkei 225 average fell 100.66 points, or 1.3 percent, to 7,890.41 as automakers continued to slide amid signs of slumping demand for new vehicles in the United State and Toyota said it was suspending some production in Japan.
South Korea's Kospi fell 1.9 percent to 1,003.60, while Hong Kong's Hang Seng index rose 0.7 percent to 13,679.82, taking its cue from stocks in mainland China, which continued to rally after a government fund announced it had bought shares in a major bank.
New Zealand's share index jumped 3 percent after the central bank slashed its cash rate by a record 1.5 percentage points.
Elsewhere, markets in Singapore and Indonesia rose, but those in Taiwan, Thailand, the Philippines and Malaysia fell.
The U.S. jobs report is likely to be "very bad," said Francis Lun, general manager of Fulbright Securities Ltd. in Hong Kong.
Some analysts are predicting the world's biggest economy shed as many as 350,000 jobs in November.
"I think investors are conditioned to the fact that we won't see any good jobs reports until the middle of next year," Lun said. "Markets are resigned to the fact that unemployment will continue increasing."
In Europe, worse-than-expected economic readings have stoked expectations that the Bank of England and the European Central Bank may cut interest rates aggressively on Thursday. Some central bank watchers now expect the ECB to cut by three-quarters of a point and the Bank of England to announce a half-point cut, reducing its rate to 2 percent, which would be equal to its lowest since the bank was founded in 1694.
On Wall Street Wednesday, the Dow Jones industrial average rose 172.6 points, or 2.1 percent, to 8,591.69. The Dow has gained more than 442 points in the past two sessions, recouping more than half of Monday's nearly 680 point slide.
U.S. stock index futures were down, suggesting Wall Street would open lower Thursday. Dow futures were down 103 points, or 1.2 percent, at 8,474, while S&P 500 futures were down 10.5 points, or 1.2 percent, to 858.00.
In Japan, the nation's No. 1 carmaker Toyota Motor Corp. was down 3 percent after announcing it would join the ranks of other automakers in cutting production. It plans to suspend production of some models at two plants in Japan for two days later this month to cope with slowing global demand.
Toyota's steps to reduce vehicle output were relatively minor compared with other companies but underlined the grim state of the industry while U.S. automakers continued to plead for a multibillion dollar government bailout.
Nissan Motor Co. tumbled 4.5 percent and Honda Motor Co. dived 5.2 percent.
Japan's top oil distributor Nippon Oil Corp. surged 8.8 percent after saying it will begin talks about a merger with smaller rival Nippon Mining Holdings Inc. to weather sluggish demand.
Financial stocks in Hong Kong and Shanghai continued to rally after Central Huijin Investment Company Ltd., a subsidiary of China's sovereign wealth fund, Wednesday said it bought more than 70 million shares of China Construction Bank Ltd., the country's second-largest commercial bank, between Sept. 23 and Nov. 28.
Huijing said the purchases were meant to support the stock market, which has lost some 60 percent of its value over the past year.
The benchmark Shanghai Composite Index was up 3.6 percent at 2,033.42. China Construction Bank gained 4.2 percent and Industrial & Commercial Bank of China Ltd., China's biggest commercial lender, jumped 3.4 percent.
"The government buying some shares in the open market shows its determination not to let the economy sink. It gives some optimism," said Lun of Fullbright Securities in Hong Kong.
Thai stocks, which rallied Wednesday after the central bank cut its overnight lending rate by 1 percentage point and anti-government protesters ended a weeklong occupation of Bangkok's two airports, slipped Friday. The SET index was down 0.2 percent.
Oil prices fell to fresh 3-year lows below $46 a barrel in Asia as investors expect a gloomy global economy to hurt crude demand.
Light, sweet crude for January delivery was down 88 cents to $45.91 a barrel - the lowest since $45.42 on Feb, 10, 2005 - in electronic trading on the New York Mercantile Exchange by midday in Singapore. The contract fell 17 cents overnight to settle at $46.79.