Asian stocks follow Wall Street lower after US jobs report

By JOE McDONALD
AP Business Writer

BEIJING (AP) — Asian stock markets declined Monday after Wall Street ended last week lower and China tightened anti-virus controls.

Shanghai, Tokyo, Hong Kong and South Korea declined. Oil prices rose more than $1 per barrel while the euro edged lower.

Wall Street’s benchmark S&P 500 index ended down 1.1% on Friday after U.S. government data showed hiring slowed in August. The number of jobs added still was big enough that forecasters said the Federal Reserve might see it as evidence more interest rate hikes are needed to bring down inflation that is at a four-decade high.

Asian trading may be “muted to lower” after Wall Street’s “failed attempt” at a rebound following the jobs report, said Yeap Jun Rong of IG in a report.

The Shanghai Composite Index lost less than 0.1% to 3,185.29 after the Chinese government tightened controls on movement in the southern business center of Shenzhen following virus outbreaks.

The Nikkei 225 in Tokyo lost 0.1% to 27,610.75 while the Hang Seng in Hong Kong tumbled 1.8% to 19,105.24.

The Kospi in Seoul lost 0.1% to 2,406.58 while Sydney’s S&P-ASX 200 added 0.1% to 6,837.50.

New Zealand declined while Singapore and Indonesia advanced.

Traders are uneasily watching the Fed after chair Jerome Powell said Aug. 26 that interest rates have to stay elevated to extinguish pressure for prices to rise. That dashed hopes the Fed might back of due to signs U.S. economic activity is cooling.

The Fed has raised interest rates four times this year, twice by 0.75 percentage points, triple its usual margin.

Central banks in Europe and Asia also have raised rates, fueling worries they might derail global economic growth.

On Wall Street, the Dow Jones Industrial Average also fell 1.1% on Friday after the Labor Department reported the U.S. economy added 315,000 jobs in August. That was down markedly from July’s 526,000, but average hourly pay also jumped by an unusually wide margin of 5.2% compared with a year earlier.

Forecasters warned that high wage gains might reinforce the Fed’s belief that more aggressive rate hikes are needed.

The Nasdaq composite lost 1.3%.

The U.S. market has given up much of the gains made in July and August when traders hoped the Fed might ease up.

Traders expect another 0.75 percentage point rate hike at this month’s Fed meeting, according to CME Group.

Also Friday, Russian state-run energy giant Gazprom announced a suspension of gas supply through the Nord Stream 1 pipeline to Germany might be prolonged. The company said last Wednesday the flow of gas would be stopped for three days due to urgent maintenance work.

In energy markets, benchmark U.S. crude gained $1.48 to $88.35 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose 26 cents to $86.87 on Friday. Brent crude, the price basis for international oil trading, added $1.59 to $94.61 per barrel in London. It advanced 66 cents the previous session to $93.02.

The dollar advanced to 140.28 yen from Friday’s 140.13 yen. The euro declined to 99.18 cents from 99.64 cents.