Asia stocks waver ahead of US jobs report that will put Fed stimulus decision in new light

Asian stock markets wavered between gains and losses Thursday as investors awaited a U.S. jobs report that might deliver a verdict on whether the Federal Reserve’s withdrawal of stimulus was warranted.

KEEPING SCORE: Japan’s Nikkei 225 stock average rose 0.6 per cent to 17,030.36 while Hong Kong’s Hang Seng shed 0.2 per cent to 23,654.23. South Korea’s Kospi was barely changed at 1,930.64 and Australia’s S&P/ASX 200 dropped 0.3 per cent to 5,502.50. Markets in Southeast Asia were mostly higher.

JOBS REPORT: A strong report on U.S. hiring from payrolls processor ADP suggested Friday’s official monthly employment figures will show robust employment growth. If that is the case, it will allay lingering worries that the Fed’s recent decision to withdraw its extraordinary stimulus, provided through a massive program of bond buying, was premature. Intended to spur economic recovery after the global recession, the stimulus helped markets defy gravity even in the face of poor company earnings or bad economic news.

THE QUOTE: “Friday’s jobs report will be of great interest to assess the psychology of the market,” said Chris Weston, chief market strategist at IG in Melbourne, Australia. The Federal Reserve’s “safety net isn’t there anymore and fundamentals should matter more now,” he said. “A poor number will really paint a clearer picture about whether the market is ready to revert to a more traditional stance and potentially sell-off on bad news and rally on good news.”

WALL STREET: Stocks returned to record levels on Wednesday as a rebound in oil prices boosted energy stocks. The stock market also gained after the completion of midterm elections that saw Republicans take control of the Senate. The S&P 500 rose 11.47 points, or 0.6 per cent, to 2,023.57. The Dow Jones industrial average gained 100.69 points, or 0.6 per cent, to 17,484.53. The Nasdaq composite fell two points, or less than 0.1 per cent, to 4,620.72.

ENERGY: Benchmark U.S. crude was up 5 cents at $78.73 a barrel in electronic trading on the New York Mercantile Exchange. It swooned earlier in the week on reports that Saudi Arabia was cutting prices for U.S.-bound crude. On Wednesday, oil rebounded on a smaller-than-expected increase in overall U.S. supplies.

CURRENCIES: The dollar rose to 114.65 yen from 114.62 yen late Wednesday. The euro rose to $1.2498 from $1.2487.