Asian Markets Vary Following Wall Street Gains on Employment Data — Asian stock markets were divided on Friday, after a rise on Wall Street, as investors assessed contradictory economic signals ahead of next week’s Federal Reserve meeting. While Tokyo and Hong Kong improved, Shanghai and Seoul sank. However, oil prices remained over $90 per barrel.
Wall Street climbed, recovering from Wednesday’s decline, following business reports and fewer than anticipated jobless claims revealed pockets of resilience in the U.S. economy despite repeated interest rate rises.
Investors are concerned that the Federal Reserve and central banks in Europe and Asia may derail global economic development as they raise interest rates to combat multi-decade highs in inflation.
The most recent U.S. statistics “may leave the door open for aggressive Fed tightening,” according to a report by Edward Moya of Oanda.
The Shanghai Composite Index decreased 0.2% to 3,270.86, whilst the Nikkei 225 in Tokyo rose 0.1% to 28,969.94. Hong Kong’s Hang Seng index increased 0.4% to 19,842.99.
The Kospi in Seoul declined 0.1% to 2,508.66 while the S&P-ASX 200 in Sydney rose less than 0.1% to 7,116.00.
New Zealand and Singapore declined, whilst Jakarta advanced.
Next week’s annual Jackson Hole conference in Wyoming may provide clues as to when and by how much the U.S. central bank may hike interest rates.
This week’s publication of the Fed’s July meeting minutes said that inflation is too high and made it plain that the central bank will continue to raise interest rates.
This year, the Fed has increased interest rates twice by 0.75 percentage points, which is three times the typical increase. Forecasters anticipate a boost at the September meeting of the Federal Reserve Board, but note that impetus for a similarly significant increase has diminished as economic growth has slowed.
The S&P 500 increased 0.2% to 4,283.74 on Wall Street after the Labor Department’s news that fewer Americans registered for jobless benefits last week.
“Initial jobless claims decreased, alleviating some fears that the labor market was beginning to decline,” Moya added.
Wednesday’s report indicated that July retail sales were unchanged from the previous month, amid concerns that inflation may dampen consumer spending.
The Dow Jones Industrial Average rose 0.1% to 33,999.04, a gain of 0.1%. The Nasdaq rose 0.2% to 12,965.34 yesterday.
The technology sector improved. Cisco Systems surged 5.8% on the release of good earnings.
In tandem with the increase in U.S. crude oil prices, energy stocks also gained. Devon Energy climbed 5.9%.
The department retailer Kohl’s slumped 7.7% after releasing a dismal financial outlook.
In electronic trading on the New York Mercantile Exchange, the price of benchmark U.S. oil fell by 24 cents to $90.26 a barrel. On Thursday, the contract increased $2.39 to $90.50. Brent oil, the worldwide benchmark price, fell 30 cents to $96.29 per barrel in London. It increased by $2.94 the day before to reach $96.59
The dollar rose to 136.14 yen from 135.91 yen on Thursday. The euro dropped from $1.0091 to $1.0081.
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