Asia shares fall as earnings caution sets in
Published: Sunday,
7 Oct 2012 | 11:18 PM ET
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SINGAPORE (Reuters) - Asian stocks
and other riskier assets such as commodities fell on Monday as investors
remained cautious about the outlook for the global economy and corporate
earnings despite better-than-expected U.S. jobs numbers last week.
Wall Street stocks dipped late on
Friday as an unexpected drop in the U.S. unemployment rate was overshadowed by
concerns about the earnings season, which kicks off with Alcoa Inc <AA.N>
on Tuesday, and S&P 500 futures traded in Asia eased on Monday.
"It (the jobs number) looks good
if you were worried about an imminent collapse back into recession or if you had
performed badly in a presidential debate," said Russell Jones, global interest
rate strategist at Westpac bank in Sydney, in a note.
"But the reality is that it
remains consistent with a U.S. economy growing around or a little below trend,
no more."
S&P 500 earnings for the third
quarter are forecast to have fallen 2.4 percent from the year-earlier period,
which would be the first decline in three years, according to Thomson Reuters
data.
MSCI's broadest index of Asia
Pacific shares outside Japan <.MIAPJ0000PUS> fell 0.7 percent. Japanese
financial markets were closed for a public holiday.
Equity markets have been rallying
since hitting their nadir for the year in early June, receiving a renewed burst
of impetus last month when major central banks rolled out fresh measures to
support fragile economies.
MSCI's Asia Pacific ex-Japan and
All Countries World Indexes are both up around 13 percent over the
year-to-date.
But with the euro zone sliding
back towards recession amid a still unresolved debt crisis and the U.S. recovery
far from secure, investors remain reluctant to chase growth-sensitive riskier
assets too aggressively.
"We've arrived at one of the sorts
of levels where the market needs to see a bit more evidence of a medium-term
outlook before it takes prices much beyond current levels," said Ric Spooner,
chief market analyst at CMC Markets in Sydney.
A private sector survey showing a
rebound in China's services sector in September after its growth hit a one-year
low in August had little immediate impact on markets.
The euro fell about 0.3 percent to
just below $1.30, which helped the dollar advance 0.2 percent against a basket
of major currencies <.DXY>.
UNCERTAIN OUTLOOK
Underlining the uncertain outlook
for the global economy, the World Bank cut its growth forecasts for the East
Asia and Pacific region on Monday and said there was a risk the slowdown in
China could get worse and last longer than expected.
"China's slowdown this year has
been significant, and some fear it could still accelerate," the World Bank said
in its latest East Asia and Pacific Data Monitor, which was released in
Singapore.
China, the engine of global growth
in recent years and a key consumer of commodities, is due to release at the end
of next week its growth data for the third quarter, which analysts expect to be
the weakest three months of the year.
The World Bank expects China's GDP
growth for 2012 as a whole to come in at 7.7 percent, which would be its lowest
in more than a decade.
Oil fell, with Brent crude off
around 40 cents at about $111.60 a barrel and U.S. crude down nearly 50 cents at
close to $89.40. <O/R>
"Oil is still finely balanced,"
said Michael Creed, an economist at National Australia Bank.
"On one hand, we still have a
slowing economy and what that means for oil demand. On the other hand, there is
oil supply risk at the moment."
Copper dropped more than 1 percent
to around $8,190 a metric ton (1.1023 tons) And gold lost 0.6 percent to about
$1,770 an ounce. <MET/L>
(Additional reporting by Somang
Yang in Seoul; Editing by Kim Coghill)
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