MUMBAI (MarketWatch) — Asian shares fell Friday, with a sharp overnight drop in crude oil hitting energy names, ahead of the closely-watched U.S. nonfarm payrolls report.
South Korea’s Kospi /zigman2/quotes/210598069/delayed KR:180721 +0.16% dropped 0.3%, while both Australia’s S&P/ASX 200 index /zigman2/quotes/210598100/delayed AU:XJO -2.42% and Hong Kong’s Hang Seng Index /zigman2/quotes/210598030/delayed HK:HSI -2.19% lost 0.8%.
The Shanghai Composite Index /zigman2/quotes/206600939/delayed CN:000001 +0.70% moved in and out of positive territory before settling 0.5% higher, while Japanese markets remained closed for holiday.
Wall Street closed with mild losses Thursday, one day ahead of the key U.S. jobs data for April. Economists expect that the U.S. gained 163,000 jobs last month, up from a disappointing 120,000 in March. Read U.S. jobs preview.
“The consumer is the big part of American GDP, and if people aren’t employed, they are not going to spend money. So that’s why the jobs number is important,” said Andrew Sullivan at PiperJaffray.
The U.S. payrolls numbers will cap a week of focus on global jobs data, including numbers Wednesday showing that the euro-zone unemployment rate reached a record high in March. Read more on European jobs.
“We’ve known that the [euro-zone] periphery is struggling, but now Germany is struggling as well. That places a big question mark over growth prospects. Now if you have France with a new president wanting to renegotiate part of the treaty, then that could put further stress on it,” said Sullivan ahead of the weekend’s election in France.
Chinese activist Chen Guangcheng calls Congress
Blind Chinese activist Chen Guangcheng addresses members of the U.S. Congress by cellphone from a Beijing hospital, where he is under watch by Chinese authorities. Photo: Getty Images.
Energy shares took an especially heavy hit in Asia after benchmark U.S. crude-oil futures plunged 2.6% in New York trading Thursday.
In Hong Kong, shares of Cnooc Ltd. /zigman2/quotes/203421416/delayed HK:883 -1.23% /zigman2/quotes/204964401/lastsale CEO -2.45% lost 1.3%, while those of PetroChina Co. /zigman2/quotes/204979431/delayed HK:857 -1.76% /zigman2/quotes/205108732/lastsale PTR -1.81% /zigman2/quotes/206980083/delayed CN:601857 -1.52% dropped 1.9%.
Sydney-listed Woodside Petroleum Ltd. /zigman2/quotes/203437212/delayed AU:WPL +0.71% /zigman2/quotes/206770672/delayed WOPEF +2.20% and Origin Energy Ltd. /zigman2/quotes/207944120/delayed AU:ORG +0.87% /zigman2/quotes/210354031/delayed OGFGF -29.72% both fell 2.2%, while Santos Ltd. /zigman2/quotes/207349564/delayed AU:STO +2.67% /zigman2/quotes/207933640/delayed STOSF +6.97% lost 3%.
Caltex Australia Ltd. /zigman2/quotes/207954233/delayed AU:CTX -2.23% /zigman2/quotes/207139709/delayed CTXAF -48.44% declined 0.9% after the Australian Competition and Consumer Commission announced it has started a formal investigation into the sharing of price information by gasoline retailers. Read more on ACCC probe,
Overnight weakness in other commodities also hit resource shares across Asia. Australian gold miner Newcrest Mining Ltd. /zigman2/quotes/203840223/delayed AU:NCM +2.69% /zigman2/quotes/206026738/delayed NCMGF -4.32% dropped 3.8%, while Rio Tinto Ltd. /zigman2/quotes/200083756/delayed AU:RIO -2.49% /zigman2/quotes/202627887/lastsale RIO -3.05% traded down 1.1%.
In Hong Kong, Aluminum Corp. of China Ltd. /zigman2/quotes/202960704/delayed HK:2600 -3.25% /zigman2/quotes/208051344/lastsale ACH -6.20% /zigman2/quotes/210453246/delayed CN:601600 0.00% fell 3%, and resource-focused conglomerate Citic Pacific Ltd. /zigman2/quotes/205176597/delayed HK:267 -5.43% /zigman2/quotes/208232395/delayed CTPCF +5.00% traded lower by 1.7%.
Global economic uncertainty appeared to drag on exporters as well, with Sullivan saying that, “at the moment, everything is growing, but growth is very small and it will only take a couple of headwinds to derail it.”
Among major exporters moving lower, Hong Kong-listed apparel firm Esprit Holdings Ltd. /zigman2/quotes/205943307/delayed HK:330 -6.06% /zigman2/quotes/209270177/delayed ESHDF -14.29% down 5.5%, and Seoul-traded Samsung Electronics Co. /zigman2/quotes/202367843/delayed SSNLF 0.00% losing 2.9%, despite the release of its new Galaxy phone.Read more on Samsung Electronics’ new Galaxy phone.
Concerns about global growth flow through to Asian stock markets in two ways, Sullivan said. The first is changes in allocation of global funds to Asia, while the second is that investors are reluctant to participate in the markets at all.
“Retail investors aren’t taking part because they are getting run over by macro events,” he said. “The big gorillas are the American economy and Europe’s economy. The general view is that you see problems in Europe and problems in the U.S., [and] you don’t see that China is still growing.”
Separately, shares in Sun Hung Kai Properties Ltd. /zigman2/quotes/209086152/delayed HK:16 +0.20% /zigman2/quotes/205427525/delayed SUHJY -1.84% fell 1.8%. The real-estate company, one of the world’s largest, said its former chairman Walter Kwok was arrested in connection with a high-profile bribery probe.