World shares mixed after jump in US jobless claims

SINGAPORE, Sept 24 (AP): World stock markets were mixed Friday after a jump in US unemployment claims provided more evidence of an anemic recovery in the world's biggest economy.

In early trading in Europe, the FTSE 100 index of leading British shares fell 0.2 per cent while Germany's DAX and the CAC-40 in France were little changed. Wall Street was set to post modest gains. Dow futures were up 47 points, or 0.4 per cent, to 10,653.Japanese stocks, closed the previous day for a holiday, ended lower despite an apparent intervention in the currency market by the Bank of Japan to weaken the yen.

Sentiment in global markets was undermined by US figures showing that applications for unemployment benefits rose unexpectedly last week. The US is a key market for Asia and a prolonged period of slow growth there could weigh on the profits of the region's exporters.

"The regional economic upswing is inevitably slowing down after expanding at an unsustainably fast pace since early 2009," Capital Economics said in a report. "Manufacturing is being dragged back by the slow pace of final demand growth in the US and Europe."

Capital Economics expects economic growth in Asia excluding Japan to slow to 7 per cent next year from 8.5 per cent this year.
Also weighing on stocks was a lower reading on business activity in the 16 countries that use the euro and news that Ireland's economy shrank 1.2 per cent in the second quarter.

The Nikkei 225 stock average lost 1 per cent to 9,471.67. A strong yen kept pressure on exporters and technology shares, with Honda Motor Co. down 0.8 per cent and camera maker Canon Inc. tumbling 1.7 per cent.

In early afternoon trading in Tokyo, the dollar jumped suddenly from mid-84 yen levels to as high as 85.38 yen before slipping back under 85 yen - possibly marking the BOJ's second move to weaken in the yen in just over a week. There was no confirmation from the finance ministry or central bank.

"It appears that authorities have intervened" to buy dollars and sell the yen, said Yu Yokoi, a foreign exchange dealer at Mizuho Bank Ltd. in Tokyo.

News of Chinese restrictions on shipments to Japan of rare earths - metallic elements such as Lanthanum and Gadolinium that are crucial for superconductors, computers and hybrid electric cars - pummeled some high-tech companies. Shares of Shin-Etsu Chemical Co., which makes rare earth magnets, dived 3.4 per cent and Hitachi Metals Ltd. retreated 2.4 per cent.

Elsewhere, Hong Kong's Hang Seng index rose 0.3 per cent to 22,119.43 while Australia's S&P/ASX 200 fell 0.7 per cent to 4,601.90.

Benchmarks in India, South Korea and Indonesia gained while Taiwan, Malaysia and New Zealand fell. Financial markets in mainland China are closed Friday for a national holiday.

Analysts say that even if Asian growth slows next year, it will outpace developed economies such as the US, Japan and Europe. Emerging markets will likely account for 2.3 per centage points of the world's 3.7 per cent gross domestic product growth rate this year, and a bigger share next year, Citigroup said in a report.

The Dow Jones industrial average Thursday fell 76.89, or 0.7 per cent, to close at 10,662.42.

The Standard & Poor's 500 index fell 9.45, or 0.8 per cent, to 1,124.83, falling back below a closely watched threshold of 1,131. That had been the high end of its recent trading range until Monday, when the index charged above that level and stayed there, something analysts see as a bullish sign. Prior to Monday, the S&P had only crossed above 1,131 one time since June 21.

The Nasdaq composite index fell 7.47, or 0.3 per cent, to 2,327.08.

In currencies, the dollar rose to 84.57 yen from 84.50 yen late Thursday in New York. The euro advanced to $1.3395 from $1.3319.

Benchmark crude for November delivery was up 4 cents at $75.22 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose 47 cents to settle at $75.18 Thursday.