BEIJING (AP) — Asian stock markets sank on Monday after strong US jobs data fueled fears of further interest rate hikes to cool inflation.
Shanghai, Hong Kong and Seoul withdrew. Tokyo has earned. Oil prices have risen.
Wall Street wilted on Friday after official data showed US employers hired twice as many people in January than a month earlier. This was good news for workers, but it dampened hopes that the Federal Reserve might decide that no further rate hikes are needed to slow economic activity.
The numbers “look set to inevitably burst the Fed’s pivot betting bubble” because they “suggest a renewed acceleration in wage pressures,” Mizuho Bank’s Tan Boon Heng said in a report.
The Shanghai Composite Index fell 0.9% to 3,233.97, while Tokyo’s Nikkei 225 index rose 1.1% to 27,801.97. Hong Kong’s Hang Seng fell 2.3% to 21,163.79.
Seoul’s Kospi fell 0.9% to 2,459.07 and Sydney’s S&P-ASX 200 fell 0.2% to 7,542.00.
Singapore gained while Jakarta pulled back. The New Zealand financial markets have been closed for holidays.
On Wall Street, the benchmark S&P 500 fell 1% on Friday to 4,136.48 after the government reported the economy added 517,000 jobs in January. That was double the 260,000 in December and more than double the 185,000 forecast by economists.
Nonetheless, the S&P 500 recorded its fourth weekly gain in the past five. It is 15.6% above the October low.
Average hourly wages were 4.4% higher in January than a year earlier. It was less than December’s 4.8% increase, but higher than expected. Central bankers fear that wage growth could push up consumer prices.
The data dampened investors’ hopes that lower inflation could persuade the Fed and other central banks to ease plans for further rate hikes. They fear that central bankers may be willing to plunge the global economy into a recession to halt inflation that is near multi-year highs.
Some traders expect the Fed to cut rates later this year, despite warnings from officials that further hikes are expected. European Central Bank officials have issued similar warnings.
The Dow Jones Industrial Average fell 0.4% to 33,926.01. The Nasdaq Composite fell 1.6% to 12,006.96.
Also on Friday, a separate report showed that US service industries returned to growth in January. It was a stronger-than-expected reading, but suggested price pressures may be easing.
In energy markets, benchmark US crude gained 17 cents to $73.56 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell $2.49 to $73.39 on Friday. Brent crude, the price basis for international oil trade, advanced 25 cents to $80.19 a barrel in London. It lost $2.23 the previous session to $79.94.
The dollar rose to 131.88 yen from 131.07 yen on Friday. The euro fell to $1.0796 from $1.0805.