HONG KONG – Asian shares dropped Thursday, while the dollar held firm, in line with a cautious global mood as investors worried about the combination of slowing global growth and the potential tapering of central bank stimulus.
The European Central Bank is particularly in focus, with analysts expecting it to announce a token step towards reducing its emergency economic support later on Thursday.
MSCI’s broadest index of Asia-Pacific shares outside Japan lost 1.04 percent while Japan’s Nikkei dropped 0.38 percent.
There were losses in Australia down 1.01 percent, Korea off 0.74 percent, and in Hong Kong which shed 1.17 percent, with tech names leading the declines there.
The Hang Seng Tech Index fell 2.44 percent in early trading, weighed by declines in Tencent Holdings down 3.7 percent and Netease Inc down over 7 percent after China’s government on Wednesday summoned gaming firms to ensure they implement new rules for the sector.
Chinese blue chips were down 0.41 percent just after the bell, and US stock futures, the S&P 500 e-minis, were down 0.16 percent.
Edison Pun, a senior market analyst at Saxo Markets, attributed the bearish global turn to strong U.S. job openings data overnight, which “means the job market is still strong, and that could mean tapering may still start in (the fourth quarter) despite the poor non-farm payroll in August,” he said.
Earlier this week, investors had bet the lower-than-expected payroll reading from Friday would mean the Federal Reserve would delay trimming its massive asset purchases, sending MSCI’s world equity index to a new all time on Tuesday.
However, the mood has turned more cautious since then, and several Fed policymakers on Wednesday signalled the U.S. central bank remains on track to reduce asset purchases this year.
On Wall Street on Wednesday, the Dow Jones Industrial Average. fell 0.2 percent, the S&P 500 lost 0.13 percent and the Nasdaq Composite dropped 0.57 percent. – Reuters
