Asian stocks fall on jitters ahead of US jobs report, STI down 1.4%

Pedestrians walking past a share price board of the Tokyo Stock Exchange in Tokyo on Sept 3, 2015.
Pedestrians walking past a share price board of the Tokyo Stock Exchange in Tokyo on Sept 3, 2015. PHOTO: AFP

TOKYO (BLOOMBERG) - Asian stocks erased early gains and fell on Friday (Sept 4), extending a seventh straight weekly slump, as some investors liquidated their position ahead of the release of the US monthly jobs report expected to either make or break the case for an interest-rate rise this month. China's stock market was closed for a public holiday.

The MSCI Asia Pacific Index declined 1.2 per cent to 124.64 as of 12:30 pm in Hong Kong. The gauge has slumped 4.9 percent this week, on course for its longest streak of weekly losses in four years. The measure is down more than 20 per cent from its seven-year high in April.

The Straits Times Index was down 1.4 per cent at 2,865.47 as of 1:02 pm.

Japan's Topix index retreated 2.6 per cent and is on course for a 7.3 per cent drop this week, its fourth straight weekly loss. Hong Kong's Hang Seng Index fell 0.6 per cent and the Hang Seng China Enterprises Index of mainland firms listed in the city lost 2.4 per cent after markets in the former British colony reopened following a holiday. Mainland Chinese markets remain closed until Monday.

South Korea's Kospi index lost 1.5 per cent and Australia's S&P/ASX 200 Index slid 0.1 per cent. India's S&P BSE Sensex Index slumped 1.9 per cent and Taiwan's Taiex Index slipped 0.8 per cent.

"The market was quiet but cautious and investors were concern about the prospect of a U.S. interest rate hike," said Steven Leung, a director at UOB Kay Hian in Hong Kong. "Players were unwilling to take risk with so many uncertainties around."

US shares on Thursday pared gains in afternoon trading in New York as optimism about European central bank stimulus gave way to anxiety over Friday's jobs report and its implications on Federal Reserve interest-rate policy.

The payrolls report represents the last major data point before the Fed meets to discuss the first increase in interest rates in nearly a decade. Futures traders are betting the Fed will push back raising its fed funds rate. The probability of an increase in September has fallen to 30 per cent, from 38 per cent at the end of last week, according to data compiled by Bloomberg.

"I would say use the volatility and pullbacks in the markets to put some money into the markets," Vasu Menon, vice president of wealth management at Oversea-Chinese Banking Corp., told Bloomberg TV from Singapore. "Nobody can be 100 percent sure where exactly markets are headed in the short term, but we're still medium-term positive on equity markets. Valuations we don't think are in bubble territory, there's enough liquidity and economic growth is healthy enough."