Asia shares extend losses as investors show pre-vote jitters
TOKYO (AP) — Asian shares extended their losses on Thursday as nervous investors fretted over the potential outcome of next week’s U.S. presidential election, which has become too close to call. But U.S. Dow and S&P futures were trading slightly higher.
KEEPING SCORE: Japan’s Nikkei 225 index lost 1.4 percent to 16,888.78 as exporters took a hit from a stronger Japanese yen. The Tokyo market was closed Thursday for a public holiday. Hong Kong’s Hang Seng edged 0.1 percent lower to 22,667.22 and South Korea’s Kospi lost 0.2 percent to 1,980.76. The S&P ASX/200 dropped 0.8 percent to 5,181.70, but the Shanghai Composite index added 0.3 percent to 3,136.68. Shares in Southeast Asia were mostly lower.
WALL STREET: The U.S. market is now on its longest losing streak since the depths of the 2008 financial crisis, though the losses are more modest. The Dow Jones industrial average dropped 0.2 percent to 17,930.67. The Standard & Poor’s 500 index lost 0.4 percent to 2,088.66 and the Nasdaq composite index fell 0.9 percent to 5,058.41. During Asian trading hours Friday, Dow futures were up 0.03 percent and S&P futures gained 0.7 percent.
U.S. POLITICS: With five days left until the election, Hillary Clinton is still leading in national polling but Donald Trump has significantly narrowed the gap, particularly in swing states. Investors like certainty, which means they generally favor a Clinton victory in the presidential election as she is seen as maintaining the status quo. Trump’s policies are less clear. The uncertainty is rattling financial markets. The VIX, a measure of volatility that is called Wall Street’s “fear gauge,” jumped 16 percent this week to its highest level since June. The measure is up 36 percent this week alone.
ANALYST VIEWPOINT: “It’s a pretty simple equation: uncertainty goes up, stock market goes down,” said David Kelly, chief global strategist with JPMorgan Funds.
U.S. JOBS REPORT: The release of jobs data in the U.S. Friday could help draw attention back to the U.S. economy, “and possibly reinforce the strength of the recovery we have seen so far from indicators reported in the consumer consumption space there,” said Nicholas Teo of KGI. The election has been the main focus this week, “Tonight’s numbers however, will momentarily bring back what’s fundamentally at risk for stocks in their quest higher - the path to normalization,” Teo said in a commentary.
CURRENCIES: The dollar was trading at 103.04 yen, barely changed from its close Thursday of 103.00. The euro slipped to $1.1092 from $1.1103.
ENERGY: The price of crude oil steadied after a five-day losing streak. Benchmark U.S. crude gained 10 cents to $44.76 a barrel in electronic trading on the New York Mercantile Exchange. It slipped 68 cents to $44.66 a barrel in New York. Brent crude, the international standard, fell 51 cents at $46.35 a barrel in London.
Business Writer Ken Sweet in New York contributed to this report.