The mood on the markets in the Asia-Pacific region is extremely cautious on Friday with weak economic data from U.S. and Japan weighing in to a significant extent. The stock markets in South Koera, Hong Kong, Shanghai, Malaysia, Taiwan and Singapore are closed today on account of Labor Day.
Among the markets that are currently trading, the Australian market is down marginally. The New Zealand stock market too is exhibiting weakness. While the benchmark S&P/ASX 200 of Australia is trading lower by 10.60 points at 3,769.90, the Australian All Ordinaries index is down 8 points at 3736. The NZX 50 index of the New Zealand stock market is down 15.31 points at 2,2725.27.
Energy and healthcare stocks are trading firm in the Australian market. Materials, utilities and consumer staples are exhibiting weakness. Industrials, information technology and financials are trading mixed.
The Nikkei 225 benchmark of the Japanese market opened on a strong note, with shares of steel, machinery and trading companies attracting attention in early trading. However, with weak economic data and an extended weekend looming large, participants were seen pressing some heavy sales in sbusequent trading.
The Nikkei index was down 23.58 points or 0.27% at 8,851.84 at the end of the morning session.
Automotives, banks, oil and textiles were trading weak. Insurance stocks were seen struggling for support. Steel stocks remained mixed.
Shares of trading companies surged higher. Real estate, machinery and communications stocks also found support. In the electrical machinery space, Cannon Inc. gained in strength following the company upgrading its group profit forecast for the year through December.
The sharp depreciation of the yen against the dollar triggered some buying in exporters. The U.S. dollar stayed in the upper 98 yen range early Friday in Tokyo, up slightly from its levels overnight in New York.
The yen fell to two-week lows against the U.S. dollar and the euro on Friday, as investors grew confident that the pace of global economic decline was abating. Currently, the yen is trading at 98.91 to the U.S. dollar.
In economic news, Japanese core inflation eased 0.1 percent year-over-year in March, the Cabinet Office said on Friday, marking the first annual decline since September 2007. Analysts had been expecting a 0.2 percent decline following a flat performance in April.
According to the release from the Ministry of Internal Affairs, Japan's unemployment rate grew by 0.4 percentage points from the previous month to hit a seasonally adjusted 4.8% in March. The rate of expansion topped the 0.3-point growth in February, prompting the ministry to maintain its overall assessment of the labor situation as rapidly deteriorating.
On the job front, the number of jobless rose by 670,000 from the previous year to 3.35 million, the highest level since April 2004. On a month-on-month basis, the number increased by 170,000, the biggest jump since comparable data became available in January 2003. And, among the jobless, those forced to quit their jobs due to factors on the employers' side jumped by 500,000 on the year to 1.06 million.
Stock markets across the Asia-Pacific region had showed strong upward moves on Thursday, with the strength seen on Wall Street overnight generating some buying interest. Japan's benchmark Nikkei 225 Index moved sharply higher, closing up 3.9 percent. Upbeat report from the U.S. central bank and a sharp rise in Japanese industrial output hinted that the global economic slowdown might be bottoming out.
The major European markets also ended the day considerably higher, with the U.K.'s FTSE 100 Index closing up 1.3 percent on the day, while the French CAC 40 Index and the German DAX Index both advanced 1.4 percent.
Wall Street reacted positively on Thursday morning to the latest batch of earnings and economic news but shed most of its gains as participants resorted to some heavy selling in energy and financials stocks. The market moved lower over the course of the day as traders reacted to news that auto giant Chrysler has filed for Chapter 11 bankruptcy protection.
President Barack Obama revealed that Chrysler would file for bankruptcy in remarks at the White House earlier in the day, adding that the company has reached an agreement to form a partnership with Italian automaker Fiat.
Obama said that he expects Chrysler's bankruptcy to be quick and minimally disruptive and said he believes the company will emerge from the process stronger and more competitive. Although Chrysler was a pillar of the U.S. auto industry for decades, its inability to move fast enough to adapt to the changing market marked the beginning of its demise.
We simply cannot keep this company or any company afloat on an endless supply of tax dollars, Obama said and noted that the government would provide nearly $3.5 billion to keep the company somewhat functioning while the filing takes place and an additional $4.7 billion once Fiat takes over.
According to a release from the Labor Department, initial jobless claims fell to 631,000 from the previous week's revised figure of 645,000. Economists had expected jobless claims to come in unchanged compared to the 640,000 originally reported for the previous week.
However, the report also showed a continued increase in continuing claims, which rose to another new record high of 6.271 million in the week ended April 18th. The continued increase suggests that people are having trouble finding jobs after they are laid off.
In earnings news, shares of Dow Chemical moved sharply higher after the chemical giant reported first quarter earnings that showed a steep decline year-over-year but came in well above analyst estimates.
On the other hand, shares of Exxon Mobil saw some weakness after the oil giant reported first quarter earnings that fell to $0.92 per share from $2.02 per share in the year-ago quarter and came in below analyst estimates of $0.95 per share.
The major averages finished the day mixed, with the Nasdaq posting a modest gain. While the Nasdaq closed up 5.36 points or 0.3 percent at 1,717.30, the Dow closed down 17.61 points or 0.2 percent at 8,168.12 and the S&P 500 closed down 0.83 points or 0.1 percent at 872.81.
The Dow closed 17.61 points or 0.2 per cent down and the Nasdaq ended up 5.36 points or 0.3% on Thursday. The S&P 500 closed down 0.83 points or 0.1 per cent.
Crude oil closed a choppy session modestly lower on Thursday on the New York Mercantile Exchange amid continuing demand concerns as traders considered a full slate of economic and corporate reports.
Light sweet crude oil for June delivery ended the day at $50.56, down 41 cents on the session. Prices fell as low as $50.21 earlier in the session after earlier hitting as high as $51.94
The manufacturing industry is likely to be in focus on Friday, with the Institute for Supply Management due to release its report on manufacturing activity in the month of April and the Commerce Department due to release its report on March factory orders.
Chevron, Clorox and MasterCard are among the firms due to due to report before the bell on Friday.
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