Asian equity markets followed Wall Street lower on Friday as higher-than-expected US inflation disappointed hopes that the Federal Reserve could move away from further interest rate hikes.
Shanghai, Tokyo, Hong Kong and Sydney are down. Oil has gone up.
Wall Street’s benchmark S&P 500 index fell 1.1% on Thursday, adding to the declines since this week’s release of government data showing August inflation remained near a four-decade high. despite four interest rate hikes this year to slow the economy.
On Thursday, US government data showed jobless claims last week fell while August consumer sales rose. This provides ammunition to Federal Reserve officials who say the economy can tolerate further rate hikes.
Wall Street’s decline indicates “no sign of relief for sentiment of risk” while labor market data “provided the green light for further tightening” of monetary policy, IG’s Yeap Jun Rong said in a report. .
The Shanghai Composite Index lost 1% to 3,166.77 after official data showed that Chinese consumer and factory activity improved in August but remained weak. Housing sales fell 30% from the previous year under the pressure of a government debt crackdown.
Tokyo’s Nikkei 225 fell 1.1% to 27,581.36 and Hong Kong’s Hang Seng fell 0.5% to 18,829.43.
Seoul’s Kospi lost 1% to 2,377.69 and Sydney’s S & P-ASX 200 fell 1.5% to 6,742.90.
Indian Sensex opened 1% lower to 59,311.07. Markets in New Zealand and Southeast Asia declined.
On Wall Street, the S&P 500 fell to 3,901.35 Thursday after the Department of Labor said the number of jobless claims last week dropped to a four-month low.
The market benchmark was down 4.1% for the week after the biggest drop in two years on Tuesday after the government reported US consumer prices rose 8.3% over the year. previous and 0.1% compared to July.
The overall figure was down from its peak of 9.1% in June, but core inflation, which excludes volatility in food and energy prices to provide a clearer picture of the trend, rose 0.6% over the month. previous year, up from the 0.3% increase in July.
Traders fear that aggressive hikes in interest rates by the Federal Reserve and central banks in Europe and Asia to control price increases could derail global economic growth. Two of the Fed’s rate hikes this year were 0.75 percentage points, three times its usual margin, and traders are expecting a similar hike this month.
Fed Chairman Jerome Powell said in August that rates will remain high for some time until the US central bank is confident that inflation is under control.
The Dow Jones Industrial Average fell 0.6% to 30,961.82. The Nasdaq slipped 1.4% to 11,552.36.
The retail sales data provided a mixed view of how American consumers are coping with inflation.
Sales rose an unexpectedly strong 0.3% in August after falling 0.4% in July.
Rail operators mostly increased after a provisional labor agreement was reached, averting a disruptive strike. Union Pacific grew 0.2% and Norfolk Southern 0.3%. CSX fell 3.4%.
In energy markets, benchmark US crude rose 24 cents to $ 85.34 a barrel in e-commerce on the New York Mercantile Exchange. The contract fell $ 3.38 on Thursday to $ 85.10. Brent crude, the price base for the international oil trade, gained 38 cents at $ 91.22 23 a barrel in London. It lost $ 3.26 the previous session to $ 90.84.
The dollar fell to 143.33 yen from 143.49 yen on Thursday. The euro fell to 99.90 cents from 99.91 cents.