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Asian stocks dip on fears of weak U.S. earnings; Japan closed on holiday

Published 10/07/2012, 10:19 PM
Updated 10/07/2012, 10:21 PM
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Investing.com - Asian stocks softened on Monday on fears that the U.S. third-quarter earnings season set to open this week will bring a wave of disappointing results.

During Asian trading on Monday, Hong Kong's Hang Seng Index was down 0.44%, while Australia's S&P/ASX200 was down 0.2%.

Japanese markets were closed on holiday.

U.S. corporations will report third-quarter earnings this week, and profit warnings in the past had many investors on edge across Asia on Monday.

This week, Alcoa, Yum! Brands, Costco, Safeway and Infosys will unveil their results for the third quarter.

Stocks also retreated on sentiments that despite a drop in the headline U.S. unemployment rate for September, major improvements are not unfolding in the labor market.

The U.S. unemployment rate fell to 7.8% percent in September from 8.1% in August, the Bureau of Labor Statistics reported Friday.

Employers added a net 114,000 jobs in September, while households reported that total employment rose by 873,000 in September following three months of little change.

The number of unemployed Americans stood at 12.1 million in September, the fewest since January 2009.

A surge in demand for part-time workers sent the headline unemployment rating falling, possibly due to political campaigns hiring younger Americans for work ahead of November's elections.

Meanwhile, the creation of just 114,000 new nonfarm payrolls reflected no major improvement from previous monthly jobs reports, investors concluded, which prompted investors to sell stocks and load up on safe-haven dollar positions.

Elsewhere, investors braced for the release of August output data out of Germany, Europe's largest economy.

Germany will release month-on-month industrial output figures later in the day and until the numbers hit the wire, investors opted to avoid stocks and other risk-on asset classes.

Markets were anticipating the country's industrial production rates to contract 0.8% in August from July, when the number rose by 1.3%.

In Hong Kong, top decliners included China Resources, down 2.49%, China Overseas, down 2.27%, and CITIC Pacific, down 1.97%.

In Australia, top decliners included Intrepid Mines, down 7.53%, Bank of Queensland, down 4.90%, and St. Barbara Ltd., down 4.85%.

European stock futures indicated a mixed to lower opening.

France's CAC 40 futures pointed to a loss of 0.18%, while Germany's DAX 30 futures pointed to a loss of 0.08%. Meanwhile in the U.K., FTSE 100 futures were up 0.01%.

Dow Jones Industrial Average futures pointed to a loss of 0.15% while the S&P 500 futures were down 0.18%.








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