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Asian markets drop, but Europe opens higher

Asian markets drop, but Europe opens higher

Major Asian markets drifted lower Monday and European stocks gained as investors awaited key data later this week for clues on whether hopes for a global economic recovery are justified.
Japanese stocks, up in early trading, fell on reports that the country's second-biggest bank and brokerage plan to sell new shares, potentially diluting their value. The Nikkei 225 index slid 93.92 points, or 1 percent, to 9,783.47, while Hong Kong's Hang Seng index declined 71.75 points, or 0.4 percent, to 18,528.51..
U.S. jobs numbers due Thursday should help investors figure out whether the world's largest economy is stabilizing, worsening or rebounding. Wednesday's quarterly "tankan" survey of Japanese business executives should also shed some light _ although with summer holidays approaching, analysts said major market moves were unlikely.
"We're going to be a bit directionless next couple weeks," said Andrew Orchard, Asian strategist for Royal Bank of Scotland in Hong Kong. "We could gradually drift higher, but we're not going see an extreme move in either direction."
The dollar got a modest lift after Chinese central bank governor Zhou Xiaochuan said over the weekend that there would be no sudden changes in China's foreign currency reserves.
"Our foreign exchange reserve policy is always quite stable. There will not be any sudden changes," Zhou said Sunday at a conference in Basel, Switzerland, according to the Chinese newspaper National Business Daily.
Traders are watching for any sign of changes in how Beijing handles its $2 trillion in foreign reserves after Premier Wen Jiabao expressed concern in March about the surge in American borrowing and appealed to Washington to safeguard Beijing's vast holdings of U.S. government debt.
The dollar rose to 95.46 yen from 95.25 late Friday in New York, while the euro slipped to $1.4010 from $1.4063.
European shares opened higher, with Britain's FTSE 100 rising 27.78 points, or 0.7 percent, to 4,269.06. Germany's DAX rose 0.4 percent to 4,793.34, while France's CAC 40 gained 0.4 percent to 3,142.99. U.S. stock index futures were narrowly mixed. Dow Jones industrial average futures were down 1 point to 8,372, while S&P 500 futures were up 0.4 point to 914.30.
Earlier, Australia's benchmark sank 0.4 percent to 3,886.9, while South Korea's Kospi slipped 0.4 percent to 1,388.45.
Markets in mainland China and India rose. The Shanghai Composite index jumped 1.6 percent to 2,975, a one-year high. India's Sensex climbed 0.8 percent to 14,8743.93.
In Tokyo, shares of Daiwa Securities Group Inc., the country's second-biggest securities company, tumbled 12.1 percent on news that it will raise about 240 billion yen ($2.5 billion) in a public share offering that will expand the number of outstanding shares by about 30 percent.
The market sank into negative territory in the afternoon after Bloomberg News reported that Japan's No. 2 bank, Mizuho Financial Group Inc., is preparing to issue about 600 billion yen ($6.3 billion) of shares. The sale could begin as early as this week, Bloomberg said citing two unnamed sources. The bank had no comment on the report.
"It's a megabank, so its impact on the market is big," said Hideaki Higashi, an equity strategist at SMBC Friend Securities in Tokyo. "But this is more of a technical development, so it hasn't changed the underlying assumption that Japan's economy is beginning to recover."
Still, investors shrugged off upbeat news that Japanese industrial production jumped 5.9 percent in May from April, the third straight monthly gain.
Thursday's U.S. employment data could give investors a better idea of where the American economy is heading. Economists polled by Thomson Reuters predict it rose to 9.6 percent in June from May's 9.4 percent, a 25-year high.
The holiday-shortened week will mean lower trading volumes. Hong Kong's market is closed Wednesday for a public holiday, while U.S. markets will be closed Friday to observe Independence Day.
Oil prices edged above $69 a barrel in Asia. Benchmark crude for August delivery gained 4 cents to $69.20 a barrel in electronic trading on the New York Mercantile Exchange.


Updated : 2021-05-11 18:25 GMT+08:00