Asia shares slip, crude steadies as China PMIs, US jobs in focus

A Chinese investor monitors share prices at a securities company in Shanghai. Asian shares dipped on Thursday (Sept 1) after lower crude oil prices dented Wall Street.
A Chinese investor monitors share prices at a securities company in Shanghai. Asian shares dipped on Thursday (Sept 1) after lower crude oil prices dented Wall Street. PHOTO: REUTER

TOKYO (REUTERS) - Asian shares dipped on Thursday (Sept 1) after lower crude oil prices dented Wall Street, as markets waited to see if US employment data could put the Federal Reserve on track to hike interest rates.

Crude oil futures steadied after skidding on data showing a large surprise weekly build in US crude and distillate stockpiles and a smaller-than-expected drawdown in gasoline.

"This is setting up to be another difficult session for Asia-Pacific markets," Angus Nicholson, market analyst at IG in Melbourne, wrote in a note. "The ASX in particular looks in for a rough day after commodities took a battering overnight."

MSCI's broadest index of Asia-Pacific shares outside Japan was down 0.2 per cent in early trading, while Australia's S&P/ASX 200 index was down 0.2 per cent.

Investors awaited China's official manufacturing Purchasing Managers' Index (PMI) as well as a private gauge later this session. Manufacturing sector likely shrank for a second straight month in August but at a marginal pace, a Reuters poll showed, suggesting the economy is steadying even as the government vows to cut more industrial overcapacity.

Japan's Nikkei stock index was wavering between positive and negative territory, as the yen came off its overnight lows.

The US dollar was down 0.2 per cent at 103.20 yen, after rising as high as 103.54, its highest since July 29. The euro was steady at US$1.1157.

Friday's US nonfarm payrolls report remains this week's key market focus, after Federal Reserve vice chair Stanley Fischer said last week the jobs data will be a factor as to when the central bank hikes interest rates. Employers are expected to have added 180,000 jobs in August, according to the median estimate of 89 economists polled by Reuters.

The ADP National Employment Report on Wednesday showed US private employers adding 177,000 jobs in August, slightly above the 175,000 forecast by a Reuters survey of economists, and contracts to buy previously owned homes surged in July.

But the dollar's gains were tempered after the Institute for Supply Management-Chicago said its business barometer dropped 4.3 points to 51.5 in August, falling short of expectations.

Crude oil futures, which posted robust gains for August, steadied after tumbling on Wednesday as data from the US Energy Information Administration rekindled fears of a supply glut.

Brent crude futures added 0.2 per cent to US$47.00 per barrel, after falling 2.8 per cent overnight but still gaining 11 percent for August. U.S. crude added 0.3 per cent to US$44.83 after shedding 3.6 per cent on Wednesday. It still gained more than 7 per cent for the month.

Spot gold edged up 0.1 per cent to US$1,309.66 an ounce, but remained not far above its overnight low of US$1,304.91, which was its weakest level since June 24, pressured by the stronger dollar.