A passer-by walks past an electronic stock board in downtown Tokyo Friday, Oct. 10, 2008. Japanese shares nose-dived more than 10 percent in morning trade Friday as panicked investors dumped stocks following massive overnight losses on Wall Street and on growing fears over a global recession. The benchmark Nikkei 225 index lost 974.12 points, or 10.64 percent, to close the morning session at 8,183.37. (AP Photo/Itsuo Inouye)
HONG KONG – Asian and European stock markets fell Friday ahead of a U.S. jobs report that investors fear will reveal massive job losses and point to a deepening recession in the world's largest economy.
After fluctuating in the morning, Asia's bourses trended down later in the session amid mounting anxiety over the closely watched non-farm payrolls data, due out later Friday in the U.S.
As the global downturn leads companies to lay off workers and curb hiring, the American economy may have shed 550,000 jobs or more last month, according to forecasters. The unemployment rate may have jumped from 6.7 percent in November to 7 percent in December, which would be the highest in more than 15 years.
Steep losses would augur more pain for Asia's export-driven economies, which depend heavily on consumer demand from the U.S. and other Western countries.
Dismal corporate news out of Asia also weighed on investors.
In Japan, electronics component maker TDK Corp. said late Thursday it would cut 8,000 workers and post its biggest net less ever this fiscal year. South Korean automaker Ssangyong Motor announced Friday it applied for protection from creditors to buy time to restructure, calling the move an "unavoidable choice" as it struggles with a liquidity crisis.
"Basically there's not much direction," said Francis Lun, general manager of Fulbright Securities Ltd. in Hong Kong. "People still fear the market will go down. All the economic figures show the global economy is in a mess, it's not going to climb out anytime soon."
Earlier in Asia, Tokyo's Nikkei 225 stock average moved in and out of the green, trading 39.62 points lower, or 0.5 percent, at 8,836.80 by the close. Hong Kong's Hang Seng Index lost 38.47 points, or 0.3 percent, to 14,377.44, after rising earlier in the session amid what analysts said was speculation about central government aid for the power sector.
In South Korea, the Kospi shed 2.1 percent even as the country's central bank cut its key interest rate for the fifth time in just three months to help shore up the country's sagging economy.
Overnight in New York, Wall Street closed mixed after lawmakers and Citigroup worked out a deal that could support the battered housing sector by limiting the number of mortgage foreclosures. Sentiment was hurt after Wal-Mart Stores Inc. issued a profit warning and reported dismal sales for December, heightening fears that consumers are faring even worse than thought.
The Dow ended down 27.24, or 0.31 percent, at 8,742.46 after being down as much as 119, but broader stock indicators climbed. The Standard & Poor's 500 index rose 3.08, or 0.34 percent.
U.S. futures pointed to losses on Wall Street ahead of the government jobs report. Dow futures were down 31 points, or 0.4 percent, at 8,665, and S&P500 futures fell 4.4 points, or 0.5 percent, to 902.30.
Oil prices recovered moderately, with light, sweet crude for February delivery up 24 cents to $41.94 a barrel in electronic trading on the New York Mercantile Exchange by midday in Singapore. The contract overnight fell 93 cents to settle at $41.70.
In currencies, the dollar slipped to 90.66 yen, down from 91.34 yen, while the euro rose to $1.3711 from $1.3699.