Global stock markets fall ahead of US jobs report

SEOUL, South Korea – Global stocks fell sharply Friday ahead of the monthly U.S. jobs report, which will shed light on the health of the world’s largest economy — and the likely pace of further interest rate increases by the Federal Reserve. Asian markets were weighed by a downbeat Japanese business survey.

KEEPING SCORE: Britain’s FTSE 100 was down 1.4 per cent to 6,090.00 while Germany’s DAX dropped 2 per cent to 9,769.56. France’s CAC 40 sank 2.1 per cent to 4,292.98. Futures pointed to a tepid start for Wall Street. Dow futures and S&P futures both fell 0.4 per cent.

U.S. JOBS: The U.S. government is scheduled to issue the monthly U.S. jobs report for March after employers added a robust 242,000 workers in February. Analysts said investors will be keen on the hourly earnings to be released later in the day as another decline in hourly earnings could prompt investors to adjust their expectations about a possible rate hike by the Federal Reserve this year.

JAPAN: Earlier, the Bank of Japan’s quarterly “tankan” index for large manufacturers fell to 6 points in March from 12 in December. Japan’s big exporters have been hit by a double whammy of a slowing Chinese economy and a rising yen. The index measures the percentage of responding companies that say business conditions are better minus the percentage that say they are worse. So an index level of 6 means slightly more companies are optimistic than pessimistic — but more pessimistic than three months ago.

ANALYST’S TAKE: The survey “managed to disappoint on every line,” Angus Nicholson said in a daily commentary, adding that the result was the worst performance since the Bank of Japan began its massive stimulus measures in the second quarter of 2013. “The Nikkei did not handle the release well, almost losing over 3 per cent today, which could indeed be seen as a nasty portent for global equities heading into U.S. earnings season.”

ASIA’S SCORECARD: Tokyo’s Nikkei 225 sank 3.6 per cent to 16,164.16, while South Korea’s Kospi fell 1.1 per cent to 1,973.57. Hong Kong’s Hang Seng index declined 1.3 per cent to 20,498.92 and the Shanghai Composite Index in mainland China finished 0.2 per cent higher at 3,009.53 after trading lower for most of the day.

OIL: Benchmark U.S. crude fell 86 cents to $37.48 per barrel in New York. The contract rose 2 cents on Thursday. Brent crude, used to price international oils, dropped 82 cents to $39.51 a barrel in London.

CURRENCIES: The dollar fell to 112.19 yen from 112.51 yen, while the euro gained to $1.1410 from $1.1380.