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Global stock markets fall ahead of US jobs report Global stock markets fall after strong US jobs report
(about 2 hours later)
SEOUL, South Korea — Global stocks fell sharply Friday ahead of the monthly U.S. jobs report, which will shed light on the health of the world’s largest economy — and the likely pace of further interest rate increases by the Federal Reserve. Asian markets were weighed by a downbeat Japanese business survey. LONDON — Global stocks fell Friday after a report showed U.S. companies continued to hire at a strong pace in March, a development that may well ratchet up expectations that the Federal Reserve will raise interest rates again sooner rather than later.
KEEPING SCORE: Britain’s FTSE 100 was down 1.4 percent to 6,090.00 while Germany’s DAX dropped 2 percent to 9,769.56. France’s CAC 40 sank 2.1 percent to 4,292.98. Futures pointed to a tepid start for Wall Street. Dow futures and S&P futures both fell 0.4 percent. KEEPING SCORE: Stocks, already lower ahead of the monthly report, remained under pressure after the figures. Britain’s FTSE 100 was down 1.4 percent to 6,087.47 shortly after its release while Germany’s DAX dropped 2.5 percent to 9,715.99. France’s CAC 40 sank 2.6 percent to 4,273.24. Futures pointed to a tepid start for Wall Street. Dow futures and S&P futures fell 0.3 percent and 0.4 percent respectively.
U.S. JOBS: The U.S. government is scheduled to issue the monthly U.S. jobs report for March after employers added a robust 242,000 workers in February. Analysts said investors will be keen on the hourly earnings to be released later in the day as another decline in hourly earnings could prompt investors to adjust their expectations about a possible rate hike by the Federal Reserve this year. U.S. JOBS: The monthly U.S. jobs report for March showed 215,000 jobs were added, slightly above expectations of around 205,000. The unemployment rate ticked up to 5 percent, however, which could temper expectations that the Fed could bring forward its next expected interest rate increase.
JAPAN: Earlier, the Bank of Japan’s quarterly “tankan” index for large manufacturers fell to 6 points in March from 12 in December. Japan’s big exporters have been hit by a double whammy of a slowing Chinese economy and a rising yen. The index measures the percentage of responding companies that say business conditions are better minus the percentage that say they are worse. So an index level of 6 means slightly more companies are optimistic than pessimistic — but more pessimistic than three months ago. ANALYST TAKE: “Another good month of hiring in the U.S. will encourage further chatter in some corners of the Fed moving closer to hiking interest rates again, but signs of weakening economic growth mean policymakers are likely to be cautious and hold off until the global economy is showing greater vigor and the U.S. economy more sparkle,” said Chris Williamson, chief economist at financial information company Markit.
ANALYST’S TAKE: The survey “managed to disappoint on every line,” Angus Nicholson said in a daily commentary, adding that the result was the worst performance since the Bank of Japan began its massive stimulus measures in the second quarter of 2013. “The Nikkei did not handle the release well, almost losing over 3 percent today, which could indeed be seen as a nasty portent for global equities heading into U.S. earnings season.” JAPAN: Earlier stocks, particularly in Asia, were hit by weak Japanese economic data. The Bank of Japan’s quarterly “tankan” index for large manufacturers fell to 6 points in March from 12 in December. Japan’s big exporters have been hit by a double whammy of a slowing Chinese economy and a rising yen. The index measures the percentage of responding companies that say business conditions are better minus the percentage that say they are worse. So an index level of 6 means slightly more companies are optimistic than pessimistic — but more pessimistic than three months ago.
ASIA’S SCORECARD: Tokyo’s Nikkei 225 sank 3.6 percent to 16,164.16, while South Korea’s Kospi fell 1.1 percent to 1,973.57. Hong Kong’s Hang Seng index declined 1.3 percent to 20,498.92 and the Shanghai Composite Index in mainland China finished 0.2 percent higher at 3,009.53 after trading lower for most of the day.ASIA’S SCORECARD: Tokyo’s Nikkei 225 sank 3.6 percent to 16,164.16, while South Korea’s Kospi fell 1.1 percent to 1,973.57. Hong Kong’s Hang Seng index declined 1.3 percent to 20,498.92 and the Shanghai Composite Index in mainland China finished 0.2 percent higher at 3,009.53 after trading lower for most of the day.
OIL: Benchmark U.S. crude fell 86 cents to $37.48 per barrel in New York. The contract rose 2 cents on Thursday. Brent crude, used to price international oils, dropped 82 cents to $39.51 a barrel in London. OIL: Benchmark U.S. crude fell $1 to $37.34 per barrel in New York. The contract rose 2 cents on Thursday. Brent crude, used to price international oils, dropped 97 cents to $39.36 a barrel in London.
CURRENCIES: The dollar fell to 112.19 yen from 112.51 yen, while the euro gained to $1.1410 from $1.1380. CURRENCIES: The dollar fell to 111.86 yen from 112.51 yen, while the euro gained to $1.1428 from $1.1380.
Copyright 2016 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.Copyright 2016 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.