All eyes are on August non-farm payrolls figures later Friday, which are being tagged as a barometer of the timeline for a Federal Reserve move on borrowing costs. The main concern at the moment for markets is what will take place tonight in the US. Next week, investors will be keeping an eye out for the Federal Reserve s Beige Book report on US economic conditions, to be released on Wednesday.
A sooner-than-expected rate increase in September by the Federal Reserve could pull foreign capital out of emerging markets in Asia. There is wide consensus among analysts that the U.S. central bank will raise rates by a quarter of a%age point in December, though opinion is divided over a rate increase in September.
Despite two strong jobs readings previously, disappointing economic growth in the first half and turmoil in overseas markets have kept the Fed on hold. The Fed had previously stated that the September rate hike would depend on the jobs data. A strong jobs report on Friday will be critical to the decision of raising rates this month
Among Asian bourses
ASX200 dives 0.8%
Australian share market ended lower for third consecutive session, as weakness in health care and financials were more than offset by gains in mining stocks. At close of trade, the benchmark S&P/ASX 200 index dropped 42.80 points, or 0.79%, to 5372.80. The broader All Ordinaries de-grew 40.60 points, or 0.74%, to 5470.60.
The biggest loser on Friday was the health care sector, which fell 2.1%, while financial stocks were 0.95% lower. Aged care facilities operator Estia Health and health food maker Select Harvest were the day's biggest losers, shedding 6% and 9% respectively. Biotechnology giant CSL dropped 2.2% to A$104.93, while Ramsay Health Care fell 2.8% to A$81.31.
Leading the four major banks lower was Commonwealth Bank, which dropped 0.8% to A$70.91. Westpac fell 1.1% to A$29.17, National Australia Bank lost 1.1% to A$27.14 and ANZ was 0.8% weaker at A$26.84. Macquarie Group shed 0.8% to A$80.61.
Bucking the broader Australian market were resources companies Rio Tinto, Newcrest Mining and BHP Billiton. Rio rose 0.9% to A$47.41, Newcrest gained 3.1% to A$22.36 and BHP added 0.05% to A$19.85.
Japan Stocks closed flat
The Japan share market closed flat, as traders awaited the latest U.S. jobs report, the strength of which could help determine the timing of the next interest-rate increase. Total 99 out of 33 TSE sectors advanced with Insurance, Electric Power & Gas, Securities & Commodities Futures, Oil & Coal Products, and Financial Business issues being major gainers, while Precision Instruments, Glass & Ceramics Products, Metal Products, and Mining issues were major losers. The Nikkei average fell 1.16 points, or 0.01%, to end at 16925.68. The Topic index jumped 3.38 points, or 0.25%, to end at 1340.76.
Shares of companies doing business overseas were mixed. Honda Motor Co fell 0.6% and Sharp dropped 0.7%. Market heavyweight Fast Retailing lost 0.61%. However, Sony Corp bucked the market's weakness to gain 1.5%, lifted by increased confidence in its business prospects.
China Market rises 0.35%
Mainland China stock market closed mild higher, as official data showed activity in China's manufacturing sector expanded in August due to a recovery in market demand and a rebound in production. China's real estate and banking stocks was firm on Friday but consumer and transportation shares weakened. The CSI300 index, which tracks the largest listed companies trading in Shanghai and Shenzhen, inclined 0.38% to 3314.11 points. The Shanghai Composite Index closed up 0.13% at 3067.35 points while the Shenzhen Composite index closed down 0.4% at 2009.29 points. For the week, the CSI300 index edged up 0.2%, while the SSEC was roughly flat, inching down 0.1%.
The purchasing managers' index (PMI) came in at 50.4 in August, rising from 49.9 in July and beating the market expectation of 49.8, according to the National Bureau of Statistics (NBS) and the China Federation of Logistics and Purchasing. A reading above 50 indicates expansion, while a reading below 50 reflects contraction. The sub-index measuring production stood at 52.6, up 0.5%age points from July and also the highest level since the start of the year. The sub-index for new orders settled at 51.3, 0.9%age points higher than the previous month. The sub-index for new export orders was 49.7, up from 49 in July but still in contraction. In US dollar-terms, China's exports contracted 4.4% year on year in July, a slight improvement on June's 4.8% contraction.
Also, NBS data released Thursday showed that activity in the non-manufacturing industry continued to expand in August, but at a slightly slower pace than in the previous month. The official non-manufacturing Purchasing Managers' Index stood at 53.5 in August, down from 53.9 in July but above the 50-point mark that separates growth from contraction.
Shares rallied in China's venture capital firms, including Luxin Venture Capital, Jiangsu Protruly Technology Group and Kunwu Jiuding Investment Holdings , after Beijing unveiled new policies to support venture capital investment and innovation.
Hong Kong Market closes higher
The Hong Kong stock market advanced, as mainland China investors stepped up buying of shares in the city ahead of a scheme to link the Shenzhen and Hong Kong stock exchanges. But, market gains were limited as investors were awaiting the release of US August non-farm payroll report tonight. Meanwhile, market focus is set on the G20 Summit, scheduled on 4 September. The benchmark Hang Seng Index inclined 104.36 points, or 0.45%, to 23266.70 points. The Hang Seng China Enterprises Index, benchmark measure of performance of mainland China enterprises, rose 80.80 points, or 0.84%, to 9686.88. Turnover increased slightly to HK$80.7 billion from HK$71.4 billion on Thursday.
Chinese interest in Hong Kong stocks spiked after the official Xinhua News Agency reported on Tuesday the Shenzhen-Hong Kong Connect is expected to be launched in mid- or late November, earlier than many had expected. On Wednesday, Chinese investors spent 4.3 billion yuan buying Hong Kong stocks under the Shanghai-Hong Kong Connect, the most since June 24, and followed by a similar amount on Thursday and Friday. In addition, "valuation of Hong Kong stocks is relatively low, attracting money seeking safety."
The European Commission approved CKH's 3 Italia and VimpelCom 50/50 JV yesterday. CK Holdings (00001) jumped 3% to HK$102.8. Jefferies Research said the deal would uplift CKH's NAV between 5% and 10%.
HKBN (01310) shot up 3% to HK$9.1, while Wharf (00004) dipped 1% to HK$53.85. A newswire reported that HKBN has tendered its bid for Wharf's telecom assets in the second round of bidding.
HSI compiler will reshuffle its constituents in the benchmark after market close today. AAC Tech (02018) will become blue chip, while Tingyi (00322) is being removed from the rank. AAC slipped 1% to HK$86.55. Tingyi gained 2% to HK$7.64. Separately, CRRC Times (03898) gained 3% to HK$42.6. The stock will be included to the HSCEI, replacing CNBM (03323), which also added 1% to HK$3.48.
Gold mining stocks were higher on rising gold price. China Gold (02099) surged 8% to HK$15.62. Zhaojin Mining (01818) gained 4% to HK$8.12. Zijing Mining (02899) climbed 2% to HK$2.61
Indian Market settles at 16-1/2 month closing high
Indian benchmark indices settled higher led by gains in auto stocks as firmness in European stocks boosted sentiment. The barometer index, the S&P BSE Sensex rose 108.63 points or 0.38% to settle at 28,532.11. The Nifty 50 index gained 35 points or 0.4% to settle at 8,809.65. The stock markets will remain close on Monday, 5 September 2016 on account of Ganesh Chaturthi holiday.
Reliance Infrastructure (RInfra) rose 4.76% after the company said it has won arbitration awards for two road projects of Rs 170 crore and that projects worth Rs 14000 crore are under advanced stages of arbitration. The announcement was made during market hours today, 2 September 2016. The company said it welcomed the series of initiatives approved by the Cabinet Committee on Economic Affairs (CCEA) to revive the construction sector. CCEA on 31 August 2016 approved a series of initiatives to revive the construction sector. As per the new initiatives, CCEA allowed contractors to move to the new speedier arbitration process, approved release of 75% of the amount in dispute against margin free bank guarantee and provided for a conciliation board comprising of independent subject experts in order to ensure speedy disposal of pending or new cases.
Coal India fell 1.64% after the company reported lower than targeted coal production and offtake in August 2016. The company announced the monthly coal production and offtake performance after market hours yesterday, 1 September 2016. Coal India and its subsidiaries on a provisional basis achieved 79% of targeted coal production at 32.43 million tonnes in August 2016. Coal offtake stood at 36.72 million tonnes in August 2016 which was 83% of targeted offtake for the month.
Elsewhere in the Asia Pacific region: New Zealand's NZX50 rose 0.04% to 7426.11. South Korea's KOSPI index added 0.3% to 2038.31. Taiwan's Taiex index fell 0.2% to 8987.55. Singapore's Straits Times index eased 0.5% to 2803.92. Indonesia's Jakarta Composite index rose 0.4% to 5353.46. Malaysia's KLCI rose 0.1% to 1671.79.
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