Hong Kong (AFP): Asian equities wobbled again Friday at the end of a draining week as fresh US jobs data put revived bets on two more Federal Reserve interest rate hikes, adding to ongoing worries about China’s economy.
Investors have largely been on the back foot since Monday, when Beijing announced a big miss on second-quarter growth that indicated the post-Covid recovery had come to a juddering halt. The uncertainty in Asia followed a sell-off in New York, where tech titans were hammered after earnings reports from Netflix and Tesla disappointed.
This week’s stumble follows a rally last week when a faster-than-expected slowdown in US inflation stoked hopes the Fed could end its rate hikes after July’s meeting while also avoiding a recession.
But confidence took a knock Thursday when fires showed a surprise drop in US jobless claims last week, suggesting the labour market remained resilient.
While data has recently pointed to a weakening in the US economy that would help ease inflation, the Fed has said it needed to see more softening in the jobs sector.
SPI Asset Management’s Stephen Innes said that while there was a good chance the economy will avoid contraction while the Fed brings inflation down, traders remained cautious.
“For now… investors are likely waiting on further evidence of soft landing dynamics to come into play — resilient growth met with a further softening in wage and price inflation,” he said.
He added that would suggest “the economy is coming into better balance”. Markets fluctuated Friday in Asia.
Hong Kong, Shanghai, Manila and Jakarta edged up but Tokyo, Sydney, Singapore, Seoul, Taipei and Wellington dipped.
Tokyo – Nikkei 225: DOWN 0.2 percent at 32,417.92 (break)
Hong Kong – Hang Seng Index: UP 0.5 percent at 19,023.33
Shanghai – Composite: UP 0.2 percent at 3,174.54
Dollar/yen: UP at 140.12 yen from 140.05 yen on Thursday
Euro/dollar: UP at $1.1140 from $1.1113
Pound/dollar: UP at $1.2880 from $1.2867
Euro/pound: DOWN at 86.47 pence from 86.50 pence
West Texas Intermediate: UP 0.6 percent at $76.12 per barrel
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