Asia: Stocks follow US lower as jobs data fuel rate-rise bets

[TOKYO] Asian stocks dropped, after the regional benchmark index surged by the most in six years on Wednesday, as data on American job openings bolstered the case for higher US interest rates.

The MSCI Asia Pacific Index sank 1.2 per cent to 127.87 as of 9:05 am in Tokyo after jumping 4.2 per cent on Wednesday. Japan's Topix index lost 2.7 per cent as the yen halted three days of declines. The Standard & Poor's 500 Index slid 1.4 per cent on Wednesday as investors weighed the implications of the employment data for next week's Federal Reserve meeting and Apple Inc slumped after unveiling new products.

"Markets will remain volatile until the Fed meeting next week," Nader Naeimi, Sydney-based head of dynamic asset allocation at AMP Capital Investors Ltd, which oversees about US$118 billion said by phone. "Investors are again focusing on the potential US interest-rate increase and how it would impact emerging markets." Job openings in the US surged to a record in July, data released on Wednesday showed. Fed officials have to consider whether market turmoil that began last month will offset the labor-market improvement and interrupt plans to raise the benchmark interest rate for the first time since 2006. Futures traders saw a 28 per cent chance that the Fed would increase rates in September, down from 32 per cent a week earlier, data compiled by Bloomberg show.

Japan's Nikkei 225 Stock Average lost 3.1 per cent after surging by most since October 2008 on Wednesday. South Korea's Kospi index slid 0.7 per cent. Australia's S&P/ASX 200 Index decreased 1 per cent. New Zealand's NZX 50 Index added 0.2 per cent after the central bank cut interest rates and said the currency should fall further. Markets in China and Hong Kong have yet to start trading.

China's Shanghai Composite Index rose 2.3 per cent on Wednesday amid speculation the government will step up stimulus to revive the flagging economy. The Hang Seng China Enterprises Index of mainland stocks traded in Hong Kong jumped 5.2 per cent, while the city's benchmark Hang Seng Index climbed 4.1 per cent.

E-mini futures on the S&P 500 fell 0.3 per cent after the underlying equity gauge failed to add to the second-biggest surge of 2015. Apple, the largest-weighted stock in the S&P 500, slipped 1.9 per cent.

BLOOMBERG