World shares muted after weak US jobs data

[January 14, 2011]  BANGKOK (AP) -- World stock markets were ending the week in sluggish mode Friday following weakness on Wall Street and a disappointing U.S labor report.

Oil prices fell to near $91 a barrel as traders mulled whether demand in a slowly recovering U.S. economy will be enough to push crude above $100 soon. In currencies, the dollar was down against the yen and the euro.

In early European trading, Britain's FTSE was 0.1 percent lower at 6,018.7 and Germany's DAX was down by 0.2 percent to 7,061.89. The CAC-40 in Paris shed 0.2 percent to 3,969.80.

Wall Street, however, was set to open higher ahead of the release of key economic data, including retail sales and consumer prices for December. Dow futures were up 0.1 percent at 11,693 while the broader S&P 500 futures were up 0.1 percent to 1,282.50.

Japan's Nikkei 225 stock average closed down 0.9 percent at 10,499.04 after Prime Minister Naoto Kan's Cabinet resigned en masse and a new government was put in place in a bid to revive the economy.

Investors were taking profits after the Nikkei closed at an eight-month high on Thursday, and the dollar's fall under the 83-yen line hurt exporters.

South Korea's Kospi rose 0.9 percent to 2,108.17, the third time this week that it has reached a record high.

Australia's S&P/ASX 200 gained 0.1 percent to 4,801.50 and benchmarks in India and the Philippines also rose. Indexes in Taiwan, Singapore and New Zealand fell.

Chinese shares dropped amid concerns of another interest rate hike before the Chinese New Year begins on Feb. 3 to curb excess liquidity.

The benchmark Shanghai Composite Index fell 1.3 percent to 2,791.34, while the Shenzhen Composite Index of China's smaller, second exchange tumbled nearly 2 percent to 1,232.73.

Analysts in the region were careful not to read too much into Wall Street's lackluster performance from the day before. Asian markets have lives of their own, according to Kwong Man Bun, chief operating officer at KGI Asia Ltd. in Hong Kong, where the Hang Seng index was up 0.2 percent to 24,283.23.

"Liquidity is quite abundant in Hong Kong," Kwong said. "The Hang Seng will reach 25,000 before the Chinese New Year." In addition, fears were easing over Europe's debt crisis and China's monetary tightening.

"That's why we have seen increasing fund inflows into Hong Kong," he said.

In New York on Thursday, stocks retreated after a report found that more people applied for unemployment benefits last week. The U.S. Labor Department said first-time applications for unemployment benefits rose 35,000 from the week before to 445,000. It was the highest level since October and above what economists had predicted.

The Dow Jones industrial average fell 23.54 points, or 0.2 percent, to 11,731.9. The broader Standard and Poor's 500 lost 2.20, or 0.2 percent, to 1,283.76. The Nasdaq composite lost 2.04, or 0.1 percent, to 2,735.29.

Kwong characterized the drop as "a minimal pullback" since the market had been at a relatively high level. For 2011, the Dow is up 154.39, or 1.3 percent.

Thursday also brought better-than-expected earnings from chip giant Intel Corp., which set a strong tone for other technology companies that are due to report quarterly results. The news bolstered the sector in Asia, with chip equipment maker Tokyo Electron Ltd. jumping 3.4 percent.

Benchmark oil for February delivery was down 19 cents to $91.21 a barrel in electronic trading on the New York Mercantile Exchange. Crude lost 46 cents to settle at $91.40 on Thursday.

In currencies, the dollar fell to 82.48 yen from 82.79 yen late Thursday. The euro rose to $1.3425 from $1.3360.

[Associated Press; By PAMELA SAMPSON]

AP researcher Ji Chen in Shanghai contributed to this report.

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