Asian stock markets were mixed Friday ahead of U.S. jobs data that might influence Federal Reserve plans for more interest rate hikes to cool surging inflation.
Shanghai and Seoul advanced while Tokyo and Hong Kong retreated. Oil prices rose more than $1.50 per barrel.
Investors looked ahead to U.S. data on August hiring to see how the economy is responding to four earlier hikes to cool inflation that is at a four-decade high. A strong reading would give ammunition to Fed officials who say higher interest rates are needed to slow economic activity and reduce upward pressure on consumer prices.
If the figures show more than 300,000 jobs were added in August, it “could likely reinforce further lean towards” a rate hike as big as 0.75 percentage points at this month's Fed meeting, said Yeap Jun Rong of IG in a report.
The Shanghai Composite Index added 0.1% to 3,189.09 while the Nikkei 225 in Tokyo lost 0.2% to 27,604.37. The Hang Seng in Hong Kong sank 0.8% to 19,443.49.
The Chinese government on Thursday ordered most residents of Chengdu, a city of 21 million people, to stay home following new virus outbreaks. That added to disruption as the area recovers from power rationing after a drought depleted reservoirs for hydroelectric dams, but economists say the nationwide economic impact should be limited.
The Kospi in Seoul advanced less than 0.1% to 2,417.25 while Sydney's S&P-ASX 200 declined less than 0.1% to 6,844.80. New Zealand and Jakarta gained while Singapore declined.
On Wall Street, the benchmark S&P 500 index rose 0.3% 3,966.85, rebounding from a four-day string of declines.
It ended August with a 4.2% loss after surging the previous month on expectations the Fed might ease off rate hikes due to signs U.S. economic activity was cooling and inflation might be leveling off.
Those hopes were dashed last week when chair Jerome Powell said the Fed needs to keep rates elevated enough “for some time” to slow the economy. The only question for many investors is how much and when the next hike will be.
The Labor Department reported Tuesday there were two jobs for every unemployed person in July, giving ammunition to Fed officials who argue for rate hikes. On Thursday, it reported unemployment claims fell last week in another sign of a strong job market.
The Dow Jones Industrial Average finished up 0.5% at 31,656.42. The Nasdaq slid 0.3% to 11,785.13 for its fifth daily drop.
Health care stocks, companies that rely on direct consumer spending and communications services providers gained. Johnson & Johnson rose 2.5%. Target gained 2.8% and Netflix added 2.9%.
Nvidia dropped 7.7% after the chip designer said the U.S. government imposed licensing requirements that might disrupt sales to China.
In energy markets, benchmark U.S. crude rose $1.65 to $88.26 per barrel in electronic trading on the New York Mercantile Exchange. The contract tumbled $2.94 to $86.61 on Thursday.
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Brent crude, the price basis for international oil trading, gained $1.64 to $94 per barrel in London. It plunged $3.28 the previous session to $92.36 a barrel.
The dollar rose to 140.32 yen from Thursday's 140.23 yen. The euro gained to 99.60 cents from 99.45 cents. Source: Theglobeandmail
