Most stocks drop on US jobs data
Updated: 2010-10-08 09:04
(HK Edition)
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Most Hong Kong stocks fell as exporters declined after US companies unexpectedly cut jobs, sparking concern the economic recovery may stall.
Yue Yuen Industrial (Holdings) Ltd fell 1.02 percent to HK$29.05. Foxconn International Holdings Ltd closed 0.52 percent lower at HK$5.73 after a report Wednesday from ADP Employer Services showed US employment dropped in September by the most since January.
Five stocks dropped for every three that rose on the Hang Seng Index (HSI), which gained less than 0.1 percent to 22,884.32. It swung between gains and losses at least eight times.
The gauge surged 8.9 percent last month, the biggest increase since July 2009, as government and industry from the US and China fueled confidence in the global economic recovery. Stocks in the measure trade at an average 14.7 times estimated earnings, the highest level since January.
"On a three-month basis, investors should be more neutral on equities, but over the next 12 months they should be overweight," Michael Preiss, chief equities strategist at Standard Chartered Bank, said Thursday. "We're not expecting a double dip, but a more meaningful economic slowdown."
The Hang Seng China Enterprises Index slid 0.3 percent to 12,738.07. Chinese mainland markets are shut until today for holidays.
Exporters dropped after the ADP report showed employment in the US decreased 39,000 last month. A US Labor Department report today is expected to show the jobless rate increased to 9.7 percent from 9.6 percent, according to the median estimate of economists.
HSBC Holdings Plc lost 0.4 percent to HK$81.70. The lender's stock rating was cut to "neutral" from "outperform" at Mediobanca SpA because of the bank's declining dependence on faster-growing emerging markets.
Futures on the HSI climbed 0.2 percent to 22,969.
Bloomberg News
(HK Edition 10/08/2010 page3)