Asian Markets Down on Profit Taking After Weak US Jobs Report

Asian markets reversed early gains and traded lower on 23 October as investors took profits after a closely watched US labour market report pointed to sluggish economic recovery in the world's largest economy.

The Japanese Nikkei finished 1.95% lower or 287.20 points at 14,426.05

Australia's S&P/ASX finished 0.32% lower or 17.00 points at 5,356.10.

South Korea's Kospi finished 0.99% lower or 20.37 points at 2,035.75.

The Shanghai Composite finished 1.25% lower or 27.54 points at 2,183.11.

Hong Kong's Hang Seng was trading 0.77% lower or 178.98 points to 23,137.01.

India's BSE Sensex was trading 0.84% lower or 176.22 points to 20,688.75.

America added 148,000 jobs in September, much lower than what analysts had forecast. Economists had predicted a gain of 180,000 jobs for the month of September.

The unemployment rate fell to 7.2%, down from 7.3% in August, according to the US Department of Labor.

The data suggests that the US economy is recovering, albeit at a very slow pace.

Market players now expect the US Federal Reserve to defer the planned reduction of its $85 billion-a-month bond-buying stimulus, to early 2014.

"For the Fed, the key takeaway from the report is likely to be that the [US] economy is in no shape to deal with the level of reduction in monetary policy stimulus," said Millan Mulraine at TD Securities in New York.

"Given the uncertainty about . . . the fallout from the government shutdown on the economy it will probably be some time before a clear picture emerges," Mulraine added, reported the Financial Times.

In China, market players blamed the heavy selling to reports that leading Chinese lenders, including Industrial and Commercial Bank of China (ICBC), had erased $3.7 billion worth of bad debt in the first half of 2013, higher than the preceding year's figure.

However, banking stocks were unaffected by the news.

"A lot of this write-off brings Chinese banks closer to a more international standard. In the past, they've put these loans further out into their non-performing portfolios rather than instead of actually writing them off so in some respects, this improves the health of these banks," said Andrew Sullivan, director of Asian Sales Trading.

Wall Street Up

On Wall Street, indices ended higher as the September jobs data suggested the Fed could defer its planned quantitative easing (QE) tapering.

The Dow finished 75.46 points higher at 15,467.66. The benchmark index is trading within 1.5% of the all-time high that it struck in September.

The S&P 500 ended 10.01 points higher at 1,754.67, surging above the 1,750 mark for the very first time.

The Nasdaq closed 9.52 higher at 3,929.57, striking a new 13-year high.

The CBOE Volatility Index (VIX), broadly regarded as the best gauge of fear in the market, ended above 13.

"U.S. stocks closed higher after the September non-farm payroll report showed fewer than expected jobs were created, leading many market participants to believe the U.S. Federal Reserve will continue asset purchases at its current pace well into 2014," Tim Radford, global analyst at Rivkin Securities said in a note to clients.

Company Stock Movements

In Tokyo, motor manufacturer Nidec shot up 5.6% after it raised its net profit outlook for the 2014 financial year, owing to strong motor-vehicle product sales.

Semiconductor maker Tokyo Electron inched up 0.9% on a Nikkei newspaper report that the firm could report 3bn yen operating loss in the six-month period to September. This will be less than half the amount forecast.

Index heavyweight Softbank reversed early gains and traded 0.4% higher. The company agreed to purchase a 57% in American firm Brightstar last week.

Automaker Honda fell 3% while consumer electronics firms Panasonic and Sharp lost over 2% each on a stronger yen.

Apple-supplier Daishinku lost 2% while TDK shed 1.3%.

In Shanghai, environment stocks were down as the government stepped up its efforts to fight the smog that has blanketed most of northern China.

Beijing Capital and Tianjin Capital lost 3% while SPC Environment was down 2%.

In Mumbai, Wipro dropped 4.85% as its July-September dollar revenue lagged that of other top software services exporters, Reuters reported.

Tata Consultancy Services fell 1.38%, HCL Technologies lost 1.37% while Infosys lost 1% as investors took profits.

In Sydney, gold miner Evolution Mining jumped 9.4% while rival Kingsgate Consolidated added 5.3% on higher bullion prices.

Insurers' stocks were pulled down by the bushfires that continue to wreck havoc outside of Sydney and in New South Wales.

QBE lost 2.3% while Suncorp Metway shed 0.4%.

In Seoul, engineering and construction major Daelim Industrial tanked 5% after it reported a 9.7% decline in third quarter operating profit.