A plunge in commodities and an unexpected rise in U.S. unemployment claims rattled investor sentiment in Asia on Friday ahead of a key jobs report,sending major benchmarks sharply lower.
Oil prices rose above $100 a barrel in Asia,consolidating after a sharp drop in the previous session. In currencies,the dollar weakened against the euro and rose against the yen after hitting a seven-week low.
Japan’s Nikkei 225 index slid 1.6 percent to 9,841.85,as the yen’s recent rise against the greenback threatened to inflict more pain on the country’s export sector,which has struggled with destroyed factories,severe parts shortages and power outages since a devastating earthquake and tsunami on March 11. Honda Motor Co. Ltd. tumbled 4.8 percent,Canon Inc. slid 3 percent and Sony Corp. lost 2.5 percent.
The dollar fell as low as 79.54 yen Thursday,sparking expectations of another intervention in currency markets by Japan. The dollar hasn’t traded below 80 yen since March 18,when the world’s richest nations intervened to weaken Japan’s currency and soften the economic blow dealt by the earthquake.
Elsewhere,South Korea’s Kospi index dropped 1.9 percent to 2,139.42 and Hong Kong’s Hang Seng index shed 0.6 percent to 23,123.14. Australia’s S&P/ASX 200 was 0.2 percent down,with mining shares dragging on the index. BHP Billiton,the world’s largest mining company,was 2.1 percent down. Rival Rio Tinto Ltd. lost 1.7 percent.
Benchmarks in Singapore,Taiwan,Indonesia and Thailand were also down,while those in New Zealand and India were higher.
On Thursday in New York,commodities fall sharply,indicating that some speculators were locking in their gains and that other investors were protecting profits because of concerns that Friday’s monthly U.S. jobs report may be worse than expected. A FactSet survey of analysts forecasts that employers added 185,000 jobs in April.
Analysts said all was not grim despite the slumping markets: dropping commodities prices might ease the pressure on central banks to take action,such as raising interest rates to slow down the pace of lending and spending to battle inflation.
“It takes pressure off central banks around the world,” said Ric Spooner,chief market analyst at CMC Markets in Sydney. “The market view is if they get relief from high commodity prices,that’s a positive thing.”
Benchmark crude for June delivery was up 43 cents at $100.23 a barrel in electronic trading on the New York Mercantile Exchange. The day before,oil plunged $9.44 to settle at $99.80 a barrel as mounting concerns about the U.S. economy triggered the biggest one-day percentage decline in more than two years.
Energy companies fell,mimicking the price of oil. China National Offshore Oil Corp.,or CNOOC Ltd.,lost 2.1 percent. PetroChina Co. Ltd. was 1.3 percent lower.
The drop in oil prices was a boost to airline companies,however. Taiwan’s EVA Airways Corp. soared 6.1 percent,China’s Eastern Airlines Corp. Ltd. jumped 5.2 percent,and South Korea’s Asiana Airlines rose 1.9 percent.
On Wall Street,stock indexes fell after the Labor Department said that first-time claims for unemployment benefits rose to 474,000 last week,the highest level in eight months. Forecasters didn’t see it coming. Economists had expected claims would drop to 410,000.
The Dow Jones industrial average lost 1.1 percent to 12,584.17. The S&P 500 dropped 0.9 percent to 1,335.10. The Nasdaq composite fell 0.5 percent to 2,814.72.
Applications for unemployment benefits have increased in three of the previous four weeks. The jump in claims,along with other signs the U.S. economic recovery is losing strength,have raised concerns about what the government’s monthly jobs report for April will reveal when it is released Friday.
In currencies,the dollar slipped against the euro to $1.4544 from $1.4530 late Thursday in New York. The greenback strengthened to 80.48 yen from 80.19 yen.