ZIMO ZHONG, Associated Press
2 hours ago
FILE – Traders work on the floor at the New York Stock Exchange in New York, Friday, July 1, 2022. (` Photo/Seth Wenig, File)
HONG KONG (`) — Major Asian stock markets fell Monday after Wall Street posted its worst week since Halloween.
U.S. futures were lower even after congressional leaders reached an agreement on overall spending levels for the current fiscal year that could help avoid a partial government shutdown later this month.
Oil prices fell after Saudi Arabia cut oil prices for Asian markets to their lowest in 27 months on Sunday.
Hong Kong's Hang Seng fell 2% to 16,152.00, led by losses in real estate and technology stocks, which fell 2.4%. The Shanghai Composite Index slipped 1.3% to 2,891.48.
Real estate stocks sold off heavily after news that major Chinese shadow bank Zhongzhi Enterprise Group, a key lender to real estate developers, filed for bankruptcy in Beijing. Meanwhile, troubled electric vehicle maker China Evergrande said its deputy chief executive had been arrested on suspicion of unspecified “crimes”.
China announced sanctions Sunday against five American defense contractors in response to U.S. arms sales to Taiwan and U.S. sanctions against Chinese companies and individuals. The announcement came less than a week before Taiwan's presidential election, which will determine the self-ruled island's relations with China, which claims Taiwan as its own.
In South Korea, the Kospi lost 0.4% to 2,567.82 and Australia's S&P/ASX 200 lost 0.5% to 7,451.50.
Taiwan's Taiex rose 0.3%, while Bangkok's SET was 0.5% lower.
Markets in Japan were closed for a holiday.
Investors await inflation reports from Japan, the US and China later this week.
On Friday, Wall Street's S&P 500 rose 0.2% to 4,697.24 after swinging between small gains and losses throughout the day. That capped the index's first losing week in the past 10 years, having entered 2024 on hopes that inflation and the overall economy would cool enough for the Federal Reserve to raise interest rates significantly later in the year could lower.
The Dow Jones Industrial Average rose 0.1% to 37,466.11 and the Nasdaq Composite gained 0.1% to 14,524.07.
Treasury yields in the bond market fluctuated wildly following the economic reports. They initially rose after the latest monthly jobs report showed that U.S. employers unexpectedly accelerated hiring last month. Average hourly wages for workers also rose, while economists had forecast a decline.
Such strong numbers are good news for workers and should keep the economy going. This has a positive impact on corporate profits, which are one of the main factors that determine stock prices.
But Wall Street is concerned that the strong data could also convince the Federal Reserve that upward pressure on inflation will continue. That, in turn, could mean that the Fed will keep interest rates high for longer than expected. Interest rates impact the other major factor that determines stock prices, with high interest rates hurting financial markets.
The jobs report briefly forced traders to delay their forecasts on when the Fed might begin cutting interest rates. However, another report on Friday showed that growth at financial, real estate and other companies in the U.S. services industry slowed more than economists had expected last month.
Overall, the data could bolster Wall Street's hopes for a perfect landing for the economy, with high interest rates slowing it just enough to curb high inflation, but not enough to trigger a recession.
In other business, the yield on the 10-year Treasury note was at 4.06% early Monday, compared with 4.04% late Friday.
Benchmark U.S. crude oil fell $1.08 to $72.73 a barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the international standard, lost $1.08 to $77.68 a barrel.
The US dollar fell to 144.19 Japanese yen from 144.59 yen. The euro rose to $1.0946 from $1.0941 late Friday.
Comments are closed.