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Asian markets hit by poor US jobs figures

June 4, 2012

HONG KONG: Asian markets tumbled further today as poor US jobs data added to already weak sentiment caused by Spain’s banking crisis and political uncertainty in Greece.

Dealers were also digesting a string of manufacturing figures from Asia to the United States that pointed to a global economic slowdown.

Tokyo ended 1.71%, or 144.62 points, lower at 8,295.63, with electronics giant Sony the stand-out loser as it fell below 1,000 yen for the first time since 1980, ending at 996 yen.

Seoul fell 2.80%, shedding 51.38 points to close at 1,783.13, while Sydney slipped 1.94%, or 78.9 points, to 3,985.0.

In afternoon trade Hong Kong was off 2.37% and Shanghai was down 1.87%.

Washington said last Friday that the economy added a meagre 69,000 jobs in May – the slowest rise for 12 months – while the unemployment rate rose for the first time in almost a year, to 8.2%.

The Labor Department also slashed its estimate of April job gains by 33%, to 77,000. The market has softened in recent months, from an average gain of 226,000 in the first three months of the year.

The disappointing numbers came after the government said the world’s largest economy slowed from an annual growth rate of 3.0% in the final quarter of 2011 to a 1.9% pace in January-March, too weak a pace to dent unemployment.

They also compounded investor woes after purchasing manager indices for May from China, India, the eurozone and the United States all came in lower, underlining the weak state of the global economy.

The Dow fell 2.22% – leaving it in the red for the first time in 2012 – while the broad-based S&P 500 tumbled 2.46% and the Nasdaq Composite sank 2.82%.

Global markets have been sent into a tailspin as Europe’s debt troubles returned to the fore last month after a general election in Greece saw a strong showing for anti-austerity parties, while a bank crisis in Spain has left the already beleaguered economy teetering.

Attention will turn to the weekend when Greece will hold a second election, with markets hoping for a victory for pro-austerity groups. Economists fear another result could see Athens tear up a bailout deal and in turn end up leaving the eurozone.

The euro bought US$1.2402, down from US$1.2423 in New York late Friday, where it had risen on the back of the poor US jobs figures.

It also fell to 96.94 yen, down from 97.01 yen in New York while the dollar was up at 78.16 yen, from 78.08 yen last Friday.

On oil markets, Brent North Sea crude for July shed US$1.73 to US$96.70 a barrel, and New York’s main contract, West Texas Intermediate (WTI) crude for July, fell US$1.59 to US$81.64.

Gold was at US$1,621.90 an ounce at 0650 GMT, compared with US$1,553.00 late Friday.



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