CANBERA (dpa-AFX) - Most Asian stocks fell in cautious trade on Friday, as investors awaited the all-important U.S. jobs report due tonight for clues on the trajectory of U.S. interest rates.
A slump in oil prices overnight on concerns of a gasoline oversupply, worries about the level of non-performing loans at Chinese banks, another terror attack in Bangladesh and a horrifying snipper attack in Dallas, Texas, also weighed on investor sentiment, heading into the weekend.
After the dismal May jobs report in which only 38,000 jobs were added, today's report is expected to show an increase of about 180,000 jobs in June. The U.S. unemployment rate is expected to tick up to 4.8 percent from 4.7 percent.
A stronger-than-expected report on the labor market following two straight months of disappointing job growth would restore investor confidence in the health of the world's largest economy. At the same time, a surprisingly weak reading in light of continued uncertainties surrounding Brexit might force the Federal Reserve to cut rates rather than increase them.
Chinese shares fell, as a weak yuan spurred fears of more capital outflows and the focus returned to emerging risks from non-performing loans at China's banks. Investors shrugged off central bank data showing a surprise increase in June foreign exchange reserves.
The benchmark Shanghai Composite index dropped 28.75 points or 0.95 percent to 2,988.09 while Hong Kong's Hang Seng ended down 142.75 points or 0.69 percent at 20,564.17.
Japanese shares fell sharply, as investors contended with a stronger yen and disappointing readings on labor cash earnings as well as nominal wage growth. Also, Japan's current account surplus shrank for the first time in 22 months in May as a firming yen curbed gains from investment overseas, a government report showed.
The Nikkei average fell 169.26 points or 1.11 percent to 15,106.98 and the broader Topix index shed 1.32 percent to close at 1,209.88. Sumitomo Realty & Development, Aeon, Tokyo Fudosan, Mitsui Fudosan and Asahi Glass tumbled 4-8 percent. Gaming group Nintendo soared almost 9 percent on expectations that its new Pokemon GO smartphone game will prove a success.
Australian shares ended flat with a positive bias as the coalition said it will gain enough seats to form a majority government. The benchmark S&P/ASX 200 index inched up 2.60 points or 0.05 percent to 5,230.50 ahead of U.S. jobs data due tonight and Chinese inflation figures slated for release over the weekend. The broader All Ordinaries index closed up 4.60 points or 0.09 percent at 5,315.60.
Fortescue Metals Group and Rio Tinto rose by 1-2 percent and shares of South32 jumped 5.2 percent despite Australia cutting its iron ore price forecast for 2016. Whitehaven Coal soared over 10 percent on higher thermal coal prices.
The big four banks ended narrowly mixed on concerns they would probably have to boost their capital buffers further to meet stringent capital requirements. Energy stocks also ended mixed after crude oil prices fell almost 5 percent overnight.
Seoul shares fell on institutional selling, as continued weakness in the yuan and fresh geopolitical concerns following a decision by the U.S. and South Korea to deploy a controversial missile defense system on the Korean peninsula spooked investors. The Kospi average erased early gains to end 10.98 points or 0.56 percent lower at 1,963.10.
Market bellwether Samsung Electronics rose 0.7 percent, a day after flagging its biggest operating profit in more than two years. Its IT affiliate Samsung SDS climbed 2.6 percent while cosmetic makers Amorepacific and LG Household & Health Care lost about 4.5 percent each.
New Zealand shares ended a tad lower to snap a nine-session winning streak. The benchmark S&P/NZX-50 index slid 7.42 points or 0.11 percent to 7,000.10, with dual-listed banks falling sharply, after Standard & Poor's cut the outlook on Australia's AAA credit rating to negative from stable.
Fisher & Paykel Healthcare and Fletcher Building dropped over 1 percent each on concerns a stronger kiwi dollar may reduce their earnings.
Elsewhere, benchmark indexes in India, Malaysia and Singapore were down between 0.2 percent and 0.6 percent. The Taiwanese market was closed due to Typhoon Nepartak, while the Indonesian market remained closed for Eid-ul-Fitr.
U.S. stocks ended mixed overnight as the fall in oil prices offset encouraging private sector employment and jobless claims data pointing to a steadying labor market. The Dow and the S&P 500 slid about 0.1 percent each while the tech-heavy Nasdaq rose 0.4 percent.
DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer
