Asian stocks in the red after strong US data renew fear of December stimulus cut

KUALA LUMPUR, Malaysia – Asian stocks were in the red Thursday after strong U.S. economic data renewed fears that the Federal Reserve may start cutting its monetary stimulus this month.

Japan’s Nikkei 225 eased 0.4 per cent to 15,343.01 and China’s Shanghai Composite fell 0.1 per cent to 2,248.89. Hong Kong’s Hang Seng was down 0.3 per cent at 23,653.47 and South Korea’s Kospi shed 0.5 per cent to 1,977.36.

Benchmarks in Singapore, Indonesia and Australia also fell.

A run of stronger economic reports has sparked anxiety that the Fed may decide to begin tapering off its $85 billion of monthly asset purchases at a policy meeting on Dec. 18.

A private payrolls report Wednesday from ADP said that U.S. businesses did the most hiring in a year in November, adding 215,000 jobs. October’s increase was also revised up to 184,000. The official data will be released Friday.

Evan Lucas, market strategist with IG in Melbourne, Australia, said new home sales were also very strong, up 25 per cent in October and the highest monthly percentage gain since 1980.

“This ADP print certainly raises upside risk to Friday’s November payrolls which are expected to come in at 184,000. A non-farm payrolls print around 200,000 is what many analysts feel is needed to reinforce the December taper argument,” he said.

Since the stimulus has helped shore up stock markets for several years, its potential withdrawal has raised roiled investors, even if it is predicated on an improving economic outlook.

On Wall Street, the Dow Jones industrial average fell 0.2 per cent to 15,889.77 and the S&P 500 eased 0.1 per cent to 1.792.81.

Benchmark crude for January delivery was up 18 cents at $97.38 a barrel in electronic trading on the New York Mercantile Exchange. The contract Wednesday rose $1.16 to $97.20.