Thursday, October 11, 2012

Asian markets up on US jobs data

HONG KONG - Asian markets rose Friday following another set of promising jobs data from the United States, while dealers were also upbeat ahead of the release of closely-watched Chinese economic figures.

Japanese shares, however, were hit by a plunge in telecom giant Softbank after it emerged it is eyeing a near $13 billion (S$15.9 billion) deal to buy Sprint Nextel of the United States, in what would be one of Japan's biggest ever overseas deals.

Tokyo was flat by the break, Hong Kong added 0.82 percent, Sydney gained 0.17 percent, Shanghai climbed 0.60 percent and Seoul rose 0.12 percent.

The gains come at the end of a week that raised new fears about the global economy, with the International Monetary Fund slashing its growth forecasts across the world, while Spain continues to refuse to ask for a bailout.

Hopes for the US economy were given another boost Thursday when the Labor Department said insurance benefits plunged unexpectedly last week to the lowest level since February 2008.

New jobless claims, a sign of the pace of layoffs, came in at 339,000 in the week to October 6, far below the previous week's 369,000 and the then-four-week average of 375,500.

Those figures come on top of data last week showing the unemployment rate had fallen to 7.8 percent in September.

However, on Wall Street the Dow fell 0.14 percent while the Nasdaq and S&P 500 were both flat.

Eyes are now on China, which will release on Saturday its trade figures for September, with investors hoping for an improvement on recent months that have revealed tumbling exports and imports as the demand in key markets dries up.

Beijing will on Monday release inflation data, followed by crucial gross domestic product figures.

Traders are also hoping leaders will soon introduce a fresh round of stimulus as a once-in-a-decade leadership transition approaches next month.

In Tokyo, broad advances stoked by a weak yen were held back by a 16 percent slump in Softbank, the country's third biggest telecoms firm, after it said it was in talks to buy Sprint for $12.8 billion.

Kenji Shiomura, strategist at Daiwa Securities, said: "Investors were discouraged by the possibility that the company could be saddled with a heavy financial burden".

"Putting aside the point of whether the deal could be successful in the long run, the market is cautious."

On forex markets the euro benefited from increased risk sentiment. In early trade it bought $1.2939, compared to $1.2926 late Thursday in New York, while it was also up at 101.53 yen from 101.25 yen.
The dollar gained to 78.49 yen from 78.33 yen.

Oil prices were higher with New York's main contract, light sweet crude for delivery in November rising 29 cents to $92.36 a barrel and Brent North Sea crude for November advancing 10 cents to $115.81.

Gold was at $1,769.98 at 0325 GMT compared with $1,770.18 late on Thursday.

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