Asia markets drift lower despite Wall Street rise
BANGKOK — Asian markets drifted lower Wednesday, marking time after a string of gains as investors wait for a U.S. employment report to shed light on how quickly the world’s biggest economy can recover.
Doubts about whether the massive rally in stocks since early March was justified by economic reality have been pushed to the sidelines as signs emerged that the global recession is easing. But overnight Wall Street gains — driven by reports showing a rise in consumer spending and pending home sales — failed to translate into buying in Asia.
Japan’s Nikkei 225 stock average was down 48.64 points, or 0.5 percent, at 10,326.37. The world’s No. 1 automaker Toyota fell 0.7 percent despite reporting a smaller-than-expected quarterly loss the previous day. Hong Kong’s Hang Seng slipped 38.89, or 0.2 percent, to 20,757.54 and South Korea’s Kospi dropped 0.4 percent to 1,560.47.
“The market is consolidating and little bit more cautious … but I don’t expect a pullback in coming months because the rally has been driven by liquidity and there is no shortage of money coming into stocks,” said Linus Yip, a strategist at First Shanghai Securities in Hong Kong.
Elsewhere, China’s Shanghai Composite Index retreated 1.5 percent, Australia’s benchmark fell 0.5 percent and Singapore’s market was off 0.2 percent.
Big corporations from the U.S. to Japan have reported smaller-than-expected losses or even eked out profits in the latest reporting season. New economic figures show U.S. gross domestic product shrinking at a slower pace — a sign the worst is past.
Traders are growing anxious as they await the U.S. Labor Department’s employment report for July due out Friday. Unemployment stands at a 26-year high of 9.5 percent and is expected to eventually top 10 percent. Investors are looking for the pace of layoffs to slow so the economy can heal.
On Tuesday, the Dow rose 33.63, or 0.4 percent, to 9,320.19. The S&P 500 index rose 3.02, or 0.3 percent, to 1,005.65, while the Nasdaq composite index rose 2.70, or 0.1 percent, to 2,011.31. The gains left stocks at new highs for the year.
Stock futures pointed to modest losses Wednesday on Wall Street with Dow futures down 17 points, or 0.2 percent, at 9,270.
Oil prices hovered above $71 a barrel in Asia as what traders saw as mixed economic news from the U.S. stalled a week-long rally.
Benchmark crude for September delivery was down 7 cents to $71.35 a barrel by midday Singapore time in electronic trading on the New York Mercantile Exchange. On Tuesday, the contract fell 16 cents to settle at $71.42.
In currencies the dollar fell to 94.94 yen from 95.23 yen and the euro rose to $1.4398 from $1.4392.
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