Asian markets mixed on US data, Spain downgrade
HONG KONG: Asian markets were mixed Friday following an uneven set of data from the United States, while sentiment was weighed by news that Spain’s credit rating had been slashed.
The yen eased ahead of a policy meeting by the Bank of Japan and following figures highlighting the weakness of the world’s number three economy.
Tokyo fell 0.11 percent by the break, Sydney shed 0.18 percent and Shanghai was 0.23 percent lower, while Hong Kong gained 0.36 percent and Seoul added 0.34 percent.
The US National Association of Realtors reported Thursday that pending home sales rose in March, providing a lift to investors amid hopes of a recovery in the crucial sector.
The group said its pending home sales index — which represents contracts signed but not closed — rose 4.1 percent in March to 101.4, its highest level since April 2010 when it hit 111.3. It added that on a 12-month basis, pending sales were up 12.8 percent.
Also on Thursday the Commerce Department said new jobless claims remained at high levels after edging up in recent weeks.
It said 388,000 people made claims in the week to April 21, compared to a revised 389,000 the previous week and a four-week moving average of 381,750, adding to concerns about Washington’s battle against unemployment.
On Wall Street the Dow gained 0.87 percent, the S&P 500 rose 0.67 percent and the Nasdaq added 0.69 percent.
“This continues the mixed signals the US economy is throwing up as investors seek guidance on how resilient its economic recovery is,” Justin Harper, market strategist at IG Markets Singapore said in a note.
Also denting confidence was news that Standard & Poor’s had cut Spain’s debt rating by two notches as the country struggles to bring down its huge public deficit amid concerns it could lead to a Greece-style crisis in the eurozone.
S&P reduced Madrid’s rating to BBB-plus and added a negative outlook, saying it expected the economy to shrink this year and next.
It also warned that the government’s budget situation was worsening and its banks would likely rely increasingly on official sources for funding as they grapple with piles of bad loans, especially in real estate.
“The downgrade should not be entirely surprising but it would further weigh on the fragile sentiment in (the) eurozone, which had undergone a series of negative political events in Holland and France earlier this week,” Credit Agricole said in a note to clients.
Eyes were on Tokyo where dealers expect Japan’s central bank will announce another round of monetary easing to fire the stuttering economy.
In early trade ahead of the policy board’s decision the dollar firmed to 81.18 from 80.96 yen in New York late Friday.
The euro was changing hands at $1.3205, down from $1.3240, while it firmed to 107.23 yen from 107.18 yen.
Before the markets opened the government released figures that reinforce the need for additional help for the economy, with household spending climbing at a slower-than-expected rate, tepid inflation and unemployment unmoved.
On oil markets, New York’s main contract, West Texas Intermediate crude for delivery in June, was down 39 cents to $104.16 per barrel while Brent North Sea crude for June shed 26 cents to $119.66.
Gold was at $1,655.00 an ounce at 0330 GMT, compared with $1,647.04 late Thursday.