Stocks head lower as investors turn focus to U.S. jobs data

HONG KONG – Global stocks were mostly lower Friday on investor uncertainty ahead of a key U.S. jobs report and an important economic planning meeting in China.

Investors turned their focus to U.S. nonfarm payroll data expected out later in the day that could provide the latest hint on when the Federal Reserve would start pulling back, or “tapering,” its stimulus. Speculation that the Fed could scale back the program was triggered by quarterly data on Thursday that showed the world’s biggest economy grew faster than expected.

“With the GDP reading out of the way, focus switches to the health of the jobs market, with the Fed swiftly running out of data to assess as it looks to make its tapering decision,” Stan Shamu of IG Markets in Melbourne wrote in a commentary.

Investors were also hanging back ahead of a weekend meeting in Beijing where China’s communist leaders are expected to lay out their long-term plan for the world’s No. 2 economy. A report that showed strong growth in Chinese exports last month was not enough to counter investor caution.

In early European trading, Britain’s FTSE 100 slipped 0.5 per cent to 6,664.52 and Germany’s DAX fell 0.6 per cent to 9,024.79. France’s CAC 40 slid 0.8 per cent to 4,248.22.

U.S. stocks were poised to bounce higher. Dow futures edged up 0.1 per cent to 15,581 and S&P 500 futures rose 0.2 per cent to 1,748.80.

Asia markets closed lower. Japan’s Nikkei 225 sank 1 per cent to end at 14,086.80 and Seoul’s Kospi dropped 1 per cent to 1,984.87. Hong Kong’s Hang Seng slid 0.6 per cent to 22,744.39. In mainland China, the Shanghai Composite fell 1.1 per cent to 2,106.13.

Benchmarks in Australia, Singapore, Taiwan, Thailand, the Philippines and Indonesia also fell.

Asian stocks followed Wall Street lower after data that showed the U.S. economy grew 2.8 per cent in the third quarter, nearly a percentage point faster than economists had predicted. That led many investors to believe the Fed would start pulling back its bond buying program, with some predicting it could happen as early as December.

The Fed is buying $85 billion in bonds every month to hold down interest rates to spur hiring and borrowing.

Investors were also staying on the sidelines as they await details from the four-day meeting in Beijing starting Saturday. Some expect the meeting to produce a wave of reforms aimed at helping the world’s No. 2 economy shift to healthier growth driven by domestic consumption and technology, but details have been scarce. Any announcements may not come until the middle of next week after the meeting has finished.

“Hong Kong investors are very cautious ahead of the China Communist Party meeting so a lot of investors would like to play the wait-and-see game,” said Jackson Wong, a vice-president at Tanrich Securities. “Secondly, the overnight sell-off in the U.S. did have some negative impact, especially after the good GDP from the U.S.,” he said. “Investors now worry that the Fed might pull the trigger to taper the QE program sooner than originally thought.”

In currencies, the euro edged up to $1.3415 from $1.3406 in late trading Thursday. The dollar slipped to 98.16 Japanese yen from 98.20 yen.

Benchmark crude for December delivery was up 8 cents to $94.28 in electronic trading on the New York Mercantile Exchange. The contract fell 60 cents to close at $94.20 a barrel on Thursday.

Looking for more?

Get the Best of Maclean's sent straight to your inbox. Sign up for news, commentary and analysis.