Asian markets recover over-night

Asian shares recovered from their lowest in about six months over-night, paving the way for European stock markets to rise on the back of firm over-night US stocks, with financial spreadbetters predicting London’s FTSE 100, Paris’s CAC-40 and Frankfurt’s DAX to open up as much as 0.5 per cent. A 0.1 per cent drop in US stock futures, however, suggested a subdued Wall Street start.

Markets remain jittery as investors assess the implications of the soft US data that followed a series of positive reports which sparked speculation the Fed would start scaling back its aggressive bond-buying stimulus scheme.

Uncertainty stirred by the US manufacturing data added to the cautionary tone ahead of Friday’s monthly nonfarm payrolls report, given that the Fed has specifically targeted employment levels in its stimulus policy.

Similarly sluggish manufacturing data from China and Europe suggested an ailing world economy still needed central bank support.

“The latest economic data from the United States and China add to growth worries, darkening the earnings outlook of listed firms,” said Kim Young-june, a market analyst at SK Securities.

MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.3 per cent to break a four-day losing streak, after hitting its lowest in nearly six months on Monday. Australian shares were up 0.3 per cent while the Australian dollar was down 0.5 per cent at $0.9722 after the Reserve Bank of Australia left interest rates unchanged as expected, but noted some scope for further easing.

Chinese shares were the biggest drag on regional bourses, with Shanghai shares shedding over 1 per cent and pushing Hong Kong shares down 0.1 per cent, after official media reported that applications by brokerages to start mutual funds appeared to have stalled. Jitters over possible tightening also weighed on sentiment.

London copper climbed for a second session, rising 0.2 per cent to $7,355 a tone on prospects for an extension of a demand-supporting U.S. bond buying programme, while the steadying dollar weighed on gold.

US crude futures fell 0.4 per cent to $93.05 a barrel while Brent eased 0.2 per cent to $101.82.

Japanese equities continued to face high volatility, swung around by currency rates as the dollar touched a three-week low against the yen and other major currencies on Monday.

Japan’s Nikkei stock average was last night up 1.7 per cent, having shed as much as 1.5 per cent earlier to a seven-week low, after tumbling 3.7 per cent the day before. The Nikkei, which had charged up to a 5-1/2-year peak less than two weeks ago for a gain of 53 per cent since the end of 2012, has now lost 15 per cent since then.

The dollar rose 0.3 per cent to 99.81 yen, recovering from a three-week low of 98.86 set on Monday, while the dollar index, measured against a basket of six key currencies, was steady around 82.758, off Monday’s three-week low of 82.428.

Reuters