Asia Stocks Drop for Sixth Day With Hong Kong Trading to Resume

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By Adam Haigh

Asian stocks dropped for a sixth day as the yen held two days of gains, curbing the earnings outlook for Japanese exporters. Trading is due to resume in Hong Kong following a two-day holiday.

The MSCI Asia Pacific Index (MXAP) declined 0.1 percent to 138.35 as of 9:00 a.m. in Tokyo, before markets open in Hong Kong. The gauge is down 2.6 percent this week, on course for the biggest weekly drop in six months. The measure has retreated 7.4 percent from a six-year high in July.

Pro-democracy leaders in Hong Kong said they will escalate protests if their demands aren’t addressed. European Central Bank’s President Mario Draghi said the central bank will buy assets for at least two years to boost inflation and economic growth in the euro area. U.S. jobless claims unexpectedly dropped last week, data showed yesterday. A report on American payrolls is due to be released today.

“Most world stock markets are currently in a correction,” said Monty Guild, chief investment officer of Los Angeles-based Guild Investment Management Inc., which runs global equity funds. “Many developed and emerging markets will be declining as investors withdraw funds to shift to U.S. dollar assets.”

Japan’s Topix index slipped 0.1 percent as the yen traded at 108.46 per dollar. Australia’s S&P/ASX 200 Index sank 0.2 percent and New Zealand’s NZX 50 Index fell 0.2 percent. Markets in South Korea, India and China are closed.

Hong Kong Chief Executive Leung Chun-ying, the city’s top official, refused calls from the protesters to resign, while offering student leaders discussions with his deputy Carrie Lam. The students, who are demanding China withdraw plans to vet candidates for 2017 elections, have said they will focus on political reform at the talks.

As investors assess the health of the U.S. economy, analysts are predicting a return to gains of more than 200,000 in nonfarm payrolls. The Federal Reserve, which is on track to announce the end of its bond-buying program this month, is assessing whether the recovery in the world’s largest economy is strong enough to withstand higher interest rates.

To contact the reporter on this story: Adam Haigh in Sydney at [email protected]

To contact the editors responsible for this story: Sarah McDonald at [email protected] Tom Redmond

 

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