Asian stocks muted on Fed tapering outlook

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Associated Press

Posted on January 8, 2014 at 11:03 PM

Updated Thursday, Jan 9 at 3:00 AM

BEIJING (AP) — Asian stock markets were muted Thursday amid concern an improved U.S. economy might prompt the Federal Reserve to reduce its stimulus faster than previously expected.

A survey Wednesday that showed U.S. employment increased in December prompted concern the Fed might accelerate the process of winding down bond buying that has supported stock prices. The Fed has been buying $85 billion of bonds a month in a strategy dubbed quantitative easing, or QE, but said in December it will trim that by $10 billion to $75 billion beginning this month.

"The bet is on QE wind-down sooner rather than later," said Mizuho Bank in a report.

Tokyo's Nikkei 225 shed 1.3 percent to 15,914.54 while China's benchmark Shanghai Composite Index gained 0.6 percent to 2,056.12. Hong Kong's Hang Seng added 0.1 percent to 23,013.63.

Elsewhere in Asia, Taiwan's Taiex was little changed and Seoul's Kospi was down less than 0.1 percent. Sydney's S&P/ASX 200 was off 0.3 percent at 5,302.60.

In the United States, payroll processor ADP said companies added 238,000 jobs in the U.S. in December, up slightly from 229,000 in the previous month. November's figures were also revised higher. Official jobs data are due to be released Friday.

On Wall Street, the Dow Jones industrial average shed 0.4 percent and the Standard & Poor's 500 lost 0.1 percent as investors looked ahead to the jobs numbers and the start of corporate earnings season.

In Europe, Germany's DAX lost 0.1 percent on Wednesday and Britain's FTSE index fell 0.5 percent. France's CAC-40 was flat.

Eurostat, the Euoprean Union's statistics office, said retail sales in the eurozone jumped 1.4 percent in November, more than expected. But it said unemployment stuck at a record-high 12.1 percent for the eighth straight month.

In currency markets, the euro rose slightly to $1.3583 from $1.3577 late Wednesday. The dollar rose 0.1 percent to 104.91 yen.

Benchmark crude for February delivery was up 32 cents to $92.66 in electronic trading on the New York Mercantile Exchange. The contract plunged $1.34 to close at $92.33 on Wednesday after government data showed U.S. demand for gasoline last week fell to its lowest level in a year

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