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Asian markets muted as traders eye further Fed rate hikes warily

Asian markets muted as traders eye further Fed rate hikes warily

BEIJING — Asian stock markets fell on Monday after Wall Street ended lower last week and China tightened virus controls.

The Nikkei 225 NIK,
in Tokyo lost 0.1% while the Hang Seng HSI,
in Hong Kong fell 1.6%.

The Shanghai Composite Index SHCOMP,
gained 0.1% after the Chinese government tightened travel controls in the southern business hub of Shenzhen following virus outbreaks.

The Kospi 180721,
in Seoul lost 0.2% while the S&P/ASX 200 XJO in Sydney,
was flat. Landmarks in Taiwan Y9999,
and New Zealand NZ50GR,
declined while Singapore STI,
and Indonesia JAKIDX,

Wall Street’s benchmark S&P 500 SPX index,
ended down 1.1% on Friday after US government data showed a slowdown in hiring in August. The number of jobs added was still large enough that forecasters said the Federal Reserve may see it as evidence that more interest rate hikes are needed to bring down inflation, which is at its highest level in recent history. four decades.

Asian trading could be “muted to lower” after Wall Street’s “failed attempt” to rebound from the jobs report, IG’s Yeap Jun Rong said in a report.

Traders are eyeing the Fed with concern after Chairman Jerome Powell said on Aug. 26 that interest rates needed to stay high to quench upward price pressure. That dashed hopes that the Fed might back down on signs of slowing US economic activity.

The Fed has raised interest rates four times this year, twice by 0.75 percentage points, or triple its usual margin.

Central banks in Europe and Asia also hiked rates, stoking fears of derailing global economic growth.

On Wall Street, the Dow Jones Industrial Average DJIA,
also fell 1.1% on Friday after the Labor Department said the U.S. economy added 315,000 jobs in August. That was sharply down from July’s 526,000, but average hourly earnings also jumped an unusually wide margin of 5.2% from a year earlier.

Forecasters warned that strong wage gains could bolster the Fed’s belief that more aggressive rate hikes are needed.

The Nasdaq composite COMP,
lost 1.3%.

The US market gave up much of the gains made in July and August when traders hoped the Fed might relax.

Traders are expecting another 0.75 percentage point rate hike at this month’s Fed meeting, according to CME Group.

Also on Friday, Russian energy giant Gazprom announced that the suspension of gas supplies through the Nord Stream 1 gas pipeline to Germany could be extended. The company announced last Wednesday that the gas flow would be stopped for three days due to urgent maintenance work.

In the energy markets, the benchmark US crude CLV22,
gained $1.48 to $88.35 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose 26 cents to $86.87 on Friday. Brent crude BRNX22,
the price basis for international oil trade, added $1.59 to $94.61 a barrel in London. It advanced 66 cents the previous session to $93.02.

The dollar USDJPY,
advanced to 140.28 yen from 140.13 yen on Friday.

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