Asia report: Markets mixed as oil prices rise, US jobs data sinks

In Japan, the Nikkei 225 eked out gains of 0.008% to 17,820.19, as the yen weakened 0.57% against the dollar to last trade at JPY 108.53.

Of the major components on the benchmark index, automation specialist Fanuc was down 0.07% and technology conglomerate SoftBank Group lost 0.96%, while fashion firm Fast Retailing managed gains of 1.54%.

The broader Topix index was 0.36% weaker by the end of trading in Tokyo, closing at 1,325.13.

On the mainland, the Shanghai Composite fell 0.6% to 2,763.99, and the smaller, technology-centric Shenzhen Composite slipped 0.47% to 1,689.57.

Fresh unofficial data released during the day showed another contraction for China’s services in March, with the Caixin/Markit services purchasing managers’ index coming in at 43 for the month, which was still below the 50 level that separates sector shrinkage from expansion.

It was, however, still a marked improvement from the record low of 26.5 set in February, when much of the country was in a state of authoritarian lockdown in a bid to stem the spread of Covid-19, which originated in the country’s Hubei province.

South Korea’s Kospi was ahead 0.03% at 1,725.44, while the Hang Seng Index in Hong Kong was off 0.19% at 23,236.11.

The blue-chip technology stocks were mixed in Seoul, with Samsung Electronics up 0.43%, while chipmaker SK Hynix fell 0.5%.

On the coronavirus front, investors in Asia had their first chance on Friday to react to woeful unemployment figures out of the United States, with initial jobless claims reaching a new record of more than 6.6 million last week - one week after setting its previous record.

Joseph Capurso of Commonwealth Bank of Australia noted that the labour market in the US had essentially collapsed, adding that it was likely to get worse given a number of states were only just starting to apply strict lockdown measures.

Market watchers were now looking to the nonfarm payrolls report, due later in the global day, for another gauge on the state of the country’s employment amid the ongoing pandemic.

“We’re waiting for the data to confirm what we already know,” said London Capital Group analyst Jasper Lawler, adding that the record stretch of jobs growth in the US, of more than 100 months, had come to a grinding halt.

“The nonfarm payrolls figure for March is expected to turn negative.

“Because the data was collected in the first half of the month, its unlikely to capture the full damage from forced lockdowns and stay home advice.

“The really hideous stuff will probably show up in the April numbers.”

Oil prices were higher as the region entered the weekend, with Brent crude last up 8.05% at $32.56 per barrel, and West Texas Intermediate ahead 4.06% at $26.39.

The surge in prices came after US president Donald Trump told CNBC overnight that he had spoken to both Russian president Vladimir Putin and Saudi Arabian crown prince Mohammed Bin Salman.

Trump said he was expecting them to announce a crude production cut of between 10 million and 15 million barrels, in a bid to end the price war that has led to the recent collapse in oil prices.

In Australia, the S&P/ASX 200 lost 1.68% by end-of-play, to settle at 5,067.50, with energy plays in the sunburnt country mostly higher on the back of oil prices.

Beach Energy was flat by the close, while Oil Search rose 4.6% and Woodside Petroleum gained 0.36%.

Across the Tasman Sea, New Zealand’s S&P/NZX 50 was up 0.65% at 9,935.18, led higher by Tourism Holdings, which added 7.5%.

The stock has suffered in recent weeks as the country’s inbound tourism market has all but dried up amid coronavirus lockdowns and restrictions.

On Friday, however, it confirmed it had reached an agreement with US recreational vehicle manufacturer Thor Industries to exit their Togo camper joint venture.

Both of the down under dollars were weaker on the greenback, with the Aussie last off 1.08% at AUD 1.6678, and the Kiwi retreating 1.06% to NZD 1.7082.