Asia Closes Lower On US Jobs Report, Europe Awaits Rate Decision

Asian markets have closed with deep losses on Thursday on the back of a weaker U.S private sector jobs report. The Nikkei 225 dropped below the 13,000 level for the first time since April 5, and closed with a loss of -0.85% or at 12,904. The index is almost 19% off from its 52 week high, which it reached on May 23 and any further drop will take the index below the 20% level which is regarded as a bear market territory. The Shanghai index was the worst performing index during the Asian session, closing with a loss of -1.27%.

Shares of Sony Corp., Sharp Corp and Nintendo Co. were the heavy losers during the session with a loss of -2%, -5% and -2.5% respectively. Stocks also extended their decline in Hong Kong and Shanghai, as investors were worried about the Chinese economic growth which caused a selloff in property and financial sector. Shares of China Overseas Land & Investment Ltd., Hang Lung Properties Ltd and Commercial Bank china all fell by 3.1%, 2.9% and 1% respectively.

The European stock market is trading mixed during the early hours of trading, with indices trying to recover from their earlier losses during the week. The IBEX 35 is the best performing index during the session and is up nearly 0.80%. The FTSE 100, DAX and CAC 40 are all up with a gain of 0.10%, 0.22% and 0.30% respectively. Investors are holding off from any heavy bets, and sitting on the side line ahead of the ECB interest rate decision and the Bank of England.

Shares of Johnson Matthey are trading higher by almost 7.7% after the company increased its dividend. Bank of America Merrill Lynch also increased the rating from neutral to buy. RSA Insurance Group PLC shares are also trading higher after an upgrade in their rating from Morgan Stanley which increased the rating from underweight to overweight. However, the banking sector is still under pressure with the Royal Bank of Scotland, Lloyds Banking Group both trading lower with a loss of 1.6% and 1% respectively.

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The above is for informational purposes only and NOT to be construed as specific trading advice. responsibility for trade decisions is solely with the reader.

by Naeem Aslam