Asian stocks sink after US jobs data fan rate hike fears

New Zealand markets were closed for a holiday.On Wall Street, the benchmark SP 500 fell 1 per cent on Friday to 4,136.48 after the government reported the economy added 517,000 jobs in January. Central bankers worry wage growth can push up consumer prices.The data dampened investor hopes that lower inflation might persuade the Fed and other central banks to ease off plans for more rate increases.


PTI | Beijing | Updated: 06-02-2023 12:01 IST | Created: 06-02-2023 12:00 IST
Asian stocks sink after US jobs data fan rate hike fears
Representative image Image Credit: ANI
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Asian stock markets sank Monday after strong US jobs data fanned fears of more interest rate hikes to cool inflation.

Shanghai, Hong Kong and Seoul retreated. Tokyo gained. Oil prices rose.

Wall Street wilted Friday after official data showed US employers hired twice as many people in January as the previous month. That was good news for workers but dampened hopes the Federal Reserve might decide no more rate increases are needed to slow economic activity.

The numbers “look set to inevitably burst the bubble on Fed pivot bets'' because they “suggest a re-acceleration in wage pressures,'' said Tan Boon Heng of Mizuho Bank in a report. The Shanghai Composite Index fell 0.8 per cent to 3,237.36 while the Nikkei 225 in Tokyo advanced 0.6 per cent to 27,671.02. The Hang Seng in Hong Kong sank 2 per cent to 21,230.81.

The Kospi in Seoul declined 1.1 per cent to 2,452.55 and Sydney's S&P-ASX 200 retreated 0.3 per cent to 7,539.00.

India's Sensex opened down 0.6 per cent at 60,472.35. Southeast Asian markets declined. New Zealand markets were closed for a holiday.

On Wall Street, the benchmark S&P 500 fell 1 per cent on Friday to 4,136.48 after the government reported the economy added 517,000 jobs in January. That was double December's 260,000 and more than double the 185,000 expected by economists.

Despite that, the S&P 500 turned in its fourth weekly gain in the past five. It is 15.6 per cent above its low point in October.

Average hourly wages were 4.4 per cent higher in January than a year earlier. That was lower than December's 4.8 per cent raise but above expectations. Central bankers worry wage growth can push up consumer prices.

The data dampened investor hopes that lower inflation might persuade the Fed and other central banks to ease off plans for more rate increases. They worry central bankers might be willing to tip the global economy into recession to stop inflation that is near multi-decade highs.

Some traders expect the Fed to cut rates late this year, despite warnings by officials that more increases are planned. Officials of the European Central Bank have issued similar warnings.

The Dow Jones Industrial Average dropped 0.4 per cent to 33,926.01. The Nasdaq composite sank 1.6 per cent to 12,006.96.

Also Friday, a separate report showed US service industries returned to growth in January. It was a stronger reading than expected but suggested pricing pressures may be easing.

In energy markets, US benchmark crude gained 23 cents to USD 73.62 per barrel in electronic trading on the New York Mercantile Exchange. The contract tumbled USD 2.49 on Friday to USD 73.39. Brent crude, the price basis for international oil trading, advanced 34 cents to USD 80.28 per barrel in London. It lost USD 2.23 the previous session to USD 79.94.

The dollar rose to 131.70 yen from Friday's 131.07 yen. The euro fell to USD 1.0796 from USD 1.0805.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)

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