Beijing, Jan 28 (BNA): Asian stock markets were mixed on Friday as traders looked ahead to data on US employment costs that could influence the Federal Reserve’s decisions on planned interest rate increases.
Tokyo and Seoul advanced while Shanghai and Hong Kong retreated.
Wall Street fell for a third day on Thursday after the US government announced that the economy grew 5.7% last year, its strongest annual rate since 1984.
Investors are looking to US data on employment costs for indications of when and how much the Federal Reserve will raise interest rates to cool high inflation. Investors expect to raise interest rates at least four times this year after Federal Reserve officials said stimulus boosting stock prices will decline sooner than previously planned.
The labor cost index is expected to show the price of labor rising about 1.2% from the previous quarter in the final three months of 2021, according to an AP report.
“Another strong wage gain could amplify market expectations” of an unusually large 0.5 percentage point hike in interest rates early in March, ActivTrades’ Anderson Alves said in a report.
The Shanghai Composite lost 0.7% to 3372.26 and Hong Kong’s Hang Seng fell 1% to 23.564.09.
The Nikkei 225 in Tokyo rose 2.1% to 26,720.06, recovering most of its losses from the previous day’s 2.5% decline.
Seoul’s Kospi rose 1.4% to 2,650.11 while Sydney’s S&P-ASX 200 rose 2% to 6,977.20. New Zealand fell 1% while Southeast Asian markets rose.
On Wall Street, the Standard & Poor’s 500 Index fell 0.5% to 4,326.51 after official data showed that the US economy grew 5.7% last year, its strongest rate since the 1984 jump of 7.2%.
The index is 10 pips away from entering a correction, implying a 10% decline from its January 3 high.
The Dow Jones Industrial Average fell less than 0.1% to 34,160.78. The Nasdaq Composite Index is down 1.4% to 13,352.78.
Stocks have been in a vortex this week as investors try to figure out what the Federal Reserve will do after Powell said inflation pressures are not abating.
“The Fed misunderstood inflation, and the rush to raise interest rates this year is sending the best-performing assets during the pandemic into a meltdown,” Oanda’s Edward Moya said in a report.
Companies that rely on consumer spending are sinking banks. Royal Caribbean shares fell 6.3 percent and JPMorgan Chase fell 1.8 percent.
Technology stocks lost ground. Expensive technology companies and other growth stocks are less attractive when prices are rising. Nvidia shares fell 3.6 percent.
In energy markets, benchmark US crude rose 61 cents to $87.22 a barrel in electronic trading on the New York Mercantile Exchange.
The contract fell 74 cents on Thursday to $86.61. Brent crude, the price basis for global oils, rose 40 cents to $88.57 a barrel in London.
The dollar rose to 115.40 yen from 115.31 yen on Thursday. The euro advanced to $1.1158 from $1.1142.
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