BEIJING – Asian stocks were mixed on Monday after strong US jobs data paved the way for a rate hike and double-digit growth in Chinese exports.
Shanghai and Tokyo advanced while Hong Kong and Seoul retreated. Oil prices rose.
Wall Street’s benchmark S&P 500 fell 0.2% on Friday after government data showed US employers added more jobs than expected in June. This dampens expectations that a slowing economy could prompt the Fed to delay or reverse plans for further rate hikes in a bid to quell inflation.
“Now they seem to be debating whether they need to be more aggressive,” Oanda’s Edward Moya said in a report.
The Shanghai Composite Index fell less than 0.1% to 3,226.04, beating forecasts after China’s exports rose 18% in July. Hong Kong’s Hang Seng fell 0.7% to 20,055.39, while Tokyo’s Nikkei 225 rose 0.2% to 28,241.09.
In Seoul, the Kospi fell 0.3% to 2,482.32 and Sydney’s S&P ASX 200 fell 0.1% to 7,005.40.
On Wall Street, the S&P 500 fell to 4,145.19 on Friday, while the Dow Jones Industrial Average rose 0.2% to 32,803.47. The Nasdaq Composite closed 0.5% lower at 12,657.55.
Investors fear tighter policy by the Fed and central banks in Europe and Asia to curb inflation, which is at a decade high, could hurt global economic growth.
Markets have also been hit by Russia’s war in Ukraine, which has pushed up prices for oil, wheat and other commodities, and uncertainty about the impact of Chinese anti-virus sanctions, which have disrupted manufacturing and shipping.
China’s exports rose 18% year on year in July, while imports rose just 2.3%, reflecting weak global demand, customs data showed on Sunday. The country’s global trade surplus rose to a record $101 billion.
Last week’s strong US jobs data gave ammunition to Fed officials, who say the economy can tolerate higher borrowing costs to quell inflation. Following Friday’s announcement, traders are expecting the Fed to hike interest rates by 0.75 percent next month, well above guidance by half a point. This is three times normal margin and the third such increase this year.
Higher interest rates tend to lower inflation by cooling business activity, but also increase the risk of a recession and job losses. The recent rise in inflation is unusual as forecasters blame shortages of goods due to the coronavirus pandemic rather than rapid economic growth.
Wall Street has had its best month for equities since late 2020, a rally largely driven by falling bond yields. Traders expected the economy to slow enough for the Fed to relax.
In energy markets, the reference price for US crude rose 7 cents to $89.08 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose 47 cents on Friday to $89.01. Brent crude, the price basis for international trade, rose 1 percent in London to $94.93 a barrel. In the previous session, it rose 80 cents to $94.92.
The dollar rose to 135.28 yen from 135.11 yen on Friday. The euro rose to $1.0181 from $1.0178.