Tokyo, Nov. 1 (BNA): Most stocks in Asia rose on Friday, led by a 5.8% jump in Hong Kong’s Hang Seng as Chinese markets rose on speculation that Beijing may begin to ease epidemic restrictions.
Tokyo’s Nikkei fell, catching up after Japanese markets were closed Thursday for a holiday. Investors are watching for signs of a recovery in demand in China and are weighing the risks of a rate hike by major central banks to rein in inflation.
Wall Street’s benchmark S&P 500 lost 1.1% on Thursday and the heavy Nasdaq Composite fell 1.7% on the day after the Federal Reserve raised its benchmark rate for the sixth time this year.
Traders are looking forward to a closely watched US jobs report later Friday, according to the Associated Press.
In the past few days, Chinese stocks have jumped on hopes that the authorities will begin to loosen strict COVID-19 controls in the country.
This would mitigate the supply chain disruptions that have slowed economic activity and pave the way for stronger demand from the world’s No. 2 economy.
Expectations of higher interest rates helped push Treasury yields higher, affecting stocks. Two-year Treasuries, which tend to track expectations for future Fed moves, rose to 4.72% from 4.61% late Wednesday and are now at their highest level since 2007, according to Tradeweb.
Not only do higher rates slow the economy by discouraging borrowing, they also make stocks look less attractive compared to lower-risk assets like bonds and CDs.
Extremely severe inflation has prompted central banks around the world to raise interest rates as well. On Thursday, the Bank of England announced the largest rate increase in three decades. The increase is the eighth in a row for the Bank of England and the largest since 1992.
Investors were hoping for economic data indicating that the Fed could avoid further interest rate increases that would go too far in slowing the economy and bringing about a recession. B
The hottest-than-expected data from the employment sector this week so far indicated that the Fed will remain aggressive. On Friday, Wall Street will get a broader update from the US government’s October jobs report.
The Labor Department is expected to announce that non-farm employers added 200,000 jobs last month. This would be the worst offer since December 2020, when the economy lost 115,000 jobs.
In energy trading on Friday, benchmark US crude rose 67 cents to $88.84 a barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the international benchmark, rose 65 cents in London to $95.32 a barrel.
In currency trading, the US dollar fell to 148.06 Japanese yen from 148.25 yen. The cost of the euro was 97.74 cents, up from 97.50 cents.
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