Asian markets mostly up after strong US jobs data
Most Asian markets started the week with gains on Monday after strong US jobs data, although stocks in Shanghai remained flat after China said it would stick to its strict zero-Covid policy.
Global stock markets and oil prices rallied last week on hopes that Beijing would roll back some of its economically painful policies aimed at eradicating the disease within its borders.
But on Saturday, the Chinese government said it would “steadfastly” stick to its current plan, which involves severe lockdowns and strict quarantine and testing regimes for even the smallest clusters of cases.
Wall Street stocks got a boost on Friday as the latest U.S. jobs data showed hiring remained resilient and wages continued to rise, albeit at a slower pace. slower pace.
The data, which comes days before the critical midterm elections in the United States, raised hopes of a soft landing for the world’s largest economy despite the Fed’s aggressive rate hikes aimed at controlling inflation.
All three major U.S. indexes ended Friday up around 1.3%, and Tokyo stocks extended those gains on Monday to end the morning session up 1.2%.
Hong Kong shares fell slightly at the open but quickly rallied to add 1.4%, adding to a jump of more than 5% in the previous session.
However, the Shanghai and Shenzhen exchanges barely changed in morning trading.
“Last week, the financial market was agitated by rumors of reopening China,” Raymond Yeung and Zhaopeng Xing of ANZ Research said in a note on Monday.
But since rumors of a reopening were unfounded, “it is more likely that the market will overinterpret new information and downplay old developments,” they wrote.
“Obviously, China feels the urgency to normalize the economy… But political leaders won’t embrace ‘living with Covid,'” the pair added.
“In our view, the availability of new locally developed vaccines will be a game-changer.”
China is the latest major economy married to a strategy of extinguishing Covid-19 outbreaks as they emerge.
It still imposes instant lockdowns, mass testing and lengthy quarantines – despite widespread disruptions to international businesses and supply chains.
Seoul rose 0.8%, Taipei 1.1% and Sydney 0.5% in early trade Monday. Singapore was stable and Jakarta fell 0.3%.
Dashed hopes of a Chinese reopening also drove down oil prices, which had rallied on Friday on optimism that Beijing could soon change course, pushing up demand for crude.
Tokyo – Nikkei 225: 1.2% up at 27,528.66 (pause)
Hong Kong – Hang Seng Index: UP 1.4% to 16,393.36
Shanghai – Composite: 0.1% down to 3,068.62%
London – FTSE 100: UP 2.0% to 7,334.84 (closing)
Pound/dollar: DOWN to $1.1325 from $1.1376 on Friday
Euro/dollar: DOWN at $0.9933 against $0.9964
Dollar/yen: UP to 147.21 yen from 146.62 yen
Euro/pound: UP at 87.80 pence against 87.56 pence
West Texas Intermediate: DOWN 1.4% to $91.28 a barrel
North Sea Brent: 1.2% down to $97.43 a barrel
New York – Dow: UP 1.3% to 32,403.22 (closing)