World News | Asian Shares Mostly Decline Ahead of Watched US Jobs Report

Tokyo, Jul 1 (AP) Asian shares were mostly lower on Thursday as investors awaited a much watched US jobs for indications of how the recovery from the pandemic is faring.

Japan's benchmark Nikkei 225 slipped 0.5per cent in early trading to 28,660.33, while South Korea's Kospi lost 0.4per cent to 3,283.57.

Australia's S&P/ASX 200 shed 0.4per cent to 7,285.10. The Shanghai Composite edged up nearly 0.1per cent to 3,594.53. Trading was closed in Hong Kong for the anniversary of the handover of the former British colony to Beijing.

The Bank of Japan's quarterly “tankan” survey showed continuous recovery, with large manufacturers' sentiment remaining largely positive despite the pandemic.

The headline survey showed a rise to 14 from 5 in the previous quarter, but that was lower than expected, according to Robert Carnell, regional head of research Asia-Pacific at ING.

The tankan measures corporate sentiment by subtracting the number of companies saying business conditions are negative from those responding they are positive.

Carnell and others said the tankan findings show the big jump in recovery for the world's third largest economy may already be over, meaning that from now, the rebound will be steady but gradual.

“Risks factors such as the more contagious delta strain of COVID-19 and U.S. payrolls report will continue to be on watch,” said Yeap Jun Rong, market strategist at IG in Singapore.

“Although there has been optimism on the vaccine front to curb the delta variant, the vaccination progress in the region will have to see some significant pick-up to deal with the spreads,” Yeap said.

Worries remain as Asia has lagged the U.S. and parts of Europe in vaccinations and some countries are enduring their worst outbreaks yet.

On Wall Street, the S&P 500 edged up 0.1per cent, bringing its advance over the past three months to 8.2per cent and 14.4per cent for the first half of the year.

Stocks have been pushing higher on optimism that the economy is strengthening and that the Federal Reserve will keep interest rates low for a while longer.

“The Fed has sort of kept the proverbial spigot open, if you will, with liquidity, so there's still a pretty sizable amount of capital out there looking for a place to go,” said Randy Frederick, vice president of trading & derivatives at Charles Schwab.

Investors are wait for the government's monthly jobs report due out Friday.

The S&P 500 index rose 5.70 points to 4,297.50. The Dow Jones Industrial Average added 0.6per cent to 34,502.51.

The Nasdaq composite fell 0.2per cent to 14,503.95. The tech-heavy index hit record highs on Monday and Tuesday.

The Russell 2000 index of small company stocks rose 0.1per cent to 2,310.55.

Industrial, financial and energy companies were among the winners Wednesday. Those gains were kept in check by a pullback in technology, communication and real estate stocks.

Many professional investors along Wall Street say stocks can keep rising from here, just not as much as they did during the first half of the year.

Interest rates remain low, even if the Federal Reserve recently indicated it could start raising rates in about two years.

And with the economy continuing to strengthen, supporters say stocks should be able to tick higher even if their prices have climbed faster than corporate profits and look expensive compared with history.

Some are more pessimistic, though, amid concerns that several measures of growth in the economy have already hit their peak.

Barry Bannister, chief equity strategist at Stifel, says U.S. manufacturing growth likely topped out in March, for example. He sees the recent pullback of stimulus in China leading to slower growth around the world and helping to knock the S&P 500 down to 3,800 in the second half of the year.

So far this year, energy stocks continue to lead the way higher among the 11 sectors in the S&P 500 with a gain of 42.4per cent.

Financials are the next-biggest gainer, up 24.5per cent, while real estate companies are up 21.7per cent. Technology companies, the biggest gainers in 2020, are up 13.2per cent. Utilities lag the rest of the market through the first half of this year with a gain of 0.8per cent.

As inflation concerns have receded through much of the quarter, that's helped push solid gains for technology companies.

Tech stocks have been the biggest gainers in the S&P 500 this quarter with a 12.9per cent rise. The sector is viewed as a high-growth area of the market, which tends to do better when inflation is low.

In energy trading, benchmark U.S. crude rose 23 cents to USD73.70 a barrel in electronic trading on the New York Mercantile Exchange. It gained 49 cents to USD73.47 on Wednesday. Brent crude, the international standard, gained 19 cents to USD74.81 a barrel.

In currency trading, the U.S. dollar inched down to 111.09 Japanese yen from 111.11 yen. The euro cost USD1.1850, down from USD1.1855. (AP)

(The above story is verified and authored by Press Trust of India (PTI) staff. PTI, India’s premier news agency, employs more than 400 journalists and 500 stringers to cover almost every district and small town in India.. The views appearing in the above post do not reflect the opinions of LatestLY)