Investors await US jobs market report

Tags: Asian markets | job losses

Written by InsiderAsia
Thursday, 03 September 2009 17:52

Trading sentiment in key Asian markets was more positive on Thursday, Sept 3 although most investors are still on the sidelines pending greater clarity on the near term outlook for equities.

Stocks traded mostly range bound in the absence of fresh leads save for the Shanghai Composite index, which has been a source of concern for global investors in recent days. The index surged 4.8% on speculations that the government will take steps to support the market.

On the other hand, investors were unnerved by the latest report on private sector job losses in the world’s largest economy. While the number of jobs lost in August narrowed from the previous month, it was still higher than market expectations.

Investors will get a more comprehensive picture on the US jobs market later this week when the Labor Department releases its report. This will include data on jobless claims as well as the number of job losses and unemployment rate for the month of August. Despite the unemployment rate falling back to 9.4% in July, most still expect the figure to top 10% by 2010 before companies will begin rehiring in earnest.

Whilst the home property and manufacturing sectors are showing signs of improvement, evidence of a recovery in consumer spending has remained elusive, so far. Consumer spending in major developed countries such as the US, Japan and the euro zone, which accounts for the largest slice of global private consumption, has been tepid. This was due to their high unemployment rates, most at currently at the highest levels in decades.

The FBM KLCI opened on a slightly stronger footing. The benchmark index was in positive territory throughout the day but gains were largely limited with investors treading cautiously. The FBM KLCI ended the day six points higher at 1,173.7. At the close, there were eight gaining stocks for every three losing ones. However, market volume remained on the thin side with less than 589 million shares traded.