Asian stock market indices were tracing a mixed pattern on Friday (2 September), with the Shanghai Composite down 0.06% at 3,061.41 as of 6.18am GMT as traders await non-farm payrolls data, which is expected to be released later in the day.
The data is a monthly report generated and put out by the US Bureau of Labor Statistics. The report which mentions the total number of paid workers in the country, could have a bearing on the US Fed's decision on interest rates.
The mixed sentiment in Asia follows weak US factory activity data. A report from the Institute of Supply Management (ISM) on Thursday (1 September) showed that factory activity in the world's largest economy had come in at 49.4 in August, marking the first decline in six months.
Hikaru Sato, a senior technical analyst at Daiwa Securities, said the poor data had changed expectations of a rate increase. "Some market participants had bet the Fed may raise US rates as early as this month, but because of the weak ISM data and poor US auto sales, such expectations seemed to have changed," Sato was quoted as saying by Reuters.
Sharon Zellner, a senior strategist at ANZ, however, argued that the weak ISM data may not have much impact on the Fed's decision on interest rates. "While the US manufacturing ISM did undershoot expectations by quite a margin, it is worth remembering that the Fed hiked last year when the ISM manufacturing was at 48.0 and had been sub-50 for three consecutive months... There is therefore potential for markets to whipsaw should we see robust US jobs data tonight, going into the US Labor Day holiday weekend," Zellner explained.
Indices in the region were trading as follows at 6.32am GMT
Hang Seng Index
Overnight (1 September), the Dow Jones Industrial Average closed at 18,419.30, up 0.10%, while the FTSE 100 closed at 6,745.97, down 0.52%
Among commodities, oil prices rebounded amid a weaker US dollar. While WTI crude oil was trading higher by 0.60% at $43.42 (£32.71) a barrel, Brent crude was 0.55% higher at $45.70 a barrel as of 6.38am GMT.