Asian stocks follow Wall Street lower after US jobs data

Beijing, Aug. 31 (BNA): Asian stocks followed Wall Street lower on Thursday after strong US jobs data boosted expectations of higher interest rates and a slowdown in Chinese manufacturing activity.

Shanghai, Tokyo, Hong Kong and Sydney prices fell. Oil prices rose by about $1 a barrel.

US government data showing Tuesday that there were two jobs for every unemployed person in July appears to support arguments that the economy can tolerate further interest rate hikes to tame multi-decade inflation. Some investors were hoping the Fed would pull back due to signs of slowing economic activity.

Oanda’s Edward Moya said in a report, according to the Associated Press (AP), that the jobs data “supported the Fed’s argument for sticking to an aggressive stance.”

The Shanghai Composite fell 0.9% to 3,197.15 after the monthly index of manufacturing showed activity contracted again in August.

Tokyo’s Nikkei 225 fell 0.6% to 28.039.91 and Hong Kong’s Hang Seng fell 1.1% to 19731.49.

South Korea’s Kospi was unchanged at 2451.14 while Sydney’s S&P-ASX 200 was down 0.2% at 6,987.00.

New Zealand advanced while Singapore and Indonesia retreated.

Investors are concerned that raising the Federal Reserve and other central banks in Europe and Asia to stem rising inflation could derail global economic growth.

Chairman Jerome Powell indicated on Friday that the Fed will stick to its strategy of raising interest rates. The Fed has raised interest rates four times this year. Two of those were up 0.75 percentage points, three times the usual margin.

Traders seem to expect a rise of 0.75 percentage points in September, half a point in November and 0.25 points in December, according to Moya.

“If the labor market does not break out and the consumer remains resilient, Wall Street may start pricing rate hikes for February and March,” Moya wrote.

On Wall Street, the S&P 500 fell 1.1% to 3,986.16. This has brought it down over the past five days to 5.5%.

The Dow Jones Industrial Average fell 1% to 31790.87. The Nasdaq Composite lost 1.1% to 11,883.14.

The US government reported that there were 11.2 million vacancies on the last day of July. That was up from 11 million in June, and the June number was also revised higher.

Technology stocks were among the biggest decliners. Chip maker Nvidia fell 2.1 percent.

In energy markets, US crude rose 89 cents to $92.53 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell $5.37 to $91.64 on Tuesday. Brent crude, used to price international trade, rose 93 cents to $98.77 a barrel in London.

The dollar fell to 138.58 yen from 138.67 yen on Tuesday. The euro rose to $1.0026 from $1.0021.

HF