Asian stocks were little changed on Friday, with investors reluctant to stake out fresh positions after disappointing U.S. employment data and over caution ahead of Greece’s weekend referendum which may decide its future in Europe.
China’s increasingly volatile markets may upstage Greek concerns in the session, after that country’s securities market regulator said it had opened an investigation into suspected
market manipulation after a slump of more than 20% in Chinese stocks since mid-June. On Thursday, Shanghai’s benchmark composite index .SSEC fell below 4,000 points for the first time since April – a key support level that analysts had expected Beijing to defend.
MSCI’s broadest index of Asia-Pacific shares outside Japan was slightly lower in early trading, on track for a 0.5% weekly loss, while Japan’s Nikkei stock index slipped 0.4%, poised to lose over 1% for the week. U.S. markets will be closed on Friday in observance of Independence Day. On Wall Street on Thursday, major stock indexes logged losses, after employment data was not as robust as many had expected. Employers hired 223,000 workers last month, fewer than the 230,000 increase forecast by economists polled by Reuters. The government also downgraded its reading on April and May job growth. Investors had been hoping that solid improvement in the labour market would reinforce expectations that the U.S. Federal Reserve will raise interest rates as early as September.
Caution reigned ahead of Greece’s Sunday referendum on an international bailout deal that could ultimately determine whether it stays or not in the Eurozone. The International Monetary Fund warned on Thursday that Greece would need an extension of its European Union loans and a potentially a large debt writeoff if it cannot implement economic reforms and its growth slows.