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Asia stocks little changed ahead of ECB; Nikkei ends flat

Published 09/06/2012, 02:42 AM
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Investing.com - Asian stock markets were little changed during late Asian trade on Thursday, as investors stuck to the sidelines ahead of the European Central Bank's key policy meeting later in the day.

Market participants also looked ahead to Friday’s U.S. non-farm payrolls data, which will allow investors to gauge the strength of the labor market and the need for additional easing by the Federal Reserve.

During late Asian trade, Hong Kong's Hang Seng Index eased down 0.1%, Australia’s ASX/200 Index rose 0.8%, while Japan’s Nikkei 225 Index ended flat.

Investors were jittery ahead of the ECB’s policy meeting later Thursday, at which President Mario Draghi was expected to announce details of measures to help stabilize the region’s sovereign debt markets.

Bloomberg reported on Wednesday that the ECB is planning "unlimited, sterilized" bond buying plan, without setting bond yield targets. The plan is reported to be focused on government bonds with maturities of up to three years.

Traders were also focusing on Friday’s crucial U.S. non-farm payrolls data. A disappointing jobs report could influence the Fed’s decision at its next policy meeting starting on September 12.

Mounting speculation the Federal Reserve was moving closer to introducing fresh measures to stimulate growth in the U.S. economy has helped support market sentiment in recent sessions.

In Tokyo, the Nikkei settled close to a five-week low in choppy trade as stocks struggled for direction ahead of the ECB’s policy meeting.

Shares in troubled electronics manufacturer Sharp tumbled 4.3% after ratings agency Moody’s downgraded the company’s short-term credit rating on Wednesday.

Elsewhere, in Hong Kong, the Hang Seng swung between gains and losses in cautious trade, but held near a six-week low amid ongoing concerns over a deeper-than-expected slowdown in China’s economy.

Inflation and industrial production data are due on Sunday, while trade numbers will be released next Monday, which may give a clearer picture of the state of the Chinese economy.

Index heavyweight HSBC Holdings provided support to the market, rising 1.1%. Europe’s largest lender commands a 15% weighting on the Hong Kong benchmark, making it the single largest constituent on the index.

Meanwhile, in Australia, the benchmark ASX/200 Index managed to outperform he region after official data showed that the nation’s unemployment dropped unexpectedly to 5.1% last month from 5.2%.

Shares in rare-earth miner Lynas surged 42.8% after winning a temporary operating license for its processing facility in Malaysia, ending months of delays.

Clothing retailer Billabong jumped 7.5% after receiving an offer of AUD694 million from private equity group Bain Capital Partners, matching an existing offer from rival suitor TPG International.

Miners were mixed after falling sharply the previous session. BHP Billiton and Rio Tinto rose 0.75% and 1.5% respectively, but iron ore maker Fortescue Metals dropped 4.8%.

Tumbling iron ore prices contributed to an 8.5% loss for the struggling iron ore producer on Wednesday.

Looking ahead, European stock market futures pointed to a mildly higher open, buoyed up by expectations that the European Central Bank will announce measures to stem the region’s debt crisis after its policy meeting later in the day.

The EURO STOXX 50 futures pointed to a gain of 0.3% at the open, France’s CAC 40 futures added 0.1%, London’s FTSE 100 futures eased up 0.2%, while Germany's DAX futures pointed to a rise of 0.2% at the open.  

Later in the day, Germany was to release a report on factory orders, while the U.S. was to release a report on ADP non-farm employment payrolls, followed by weekly government data on unemployment claims.

The country was also to release a report by the Institute for Supply Management on service sector activity.

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