Asian shares trailed Wall St, falling ahead of the US jobs update

BEIJING (AP) — Asian stock markets followed Wall Street’s slide on Friday ahead of a U.S. jobs update amid concerns about possible further interest rate hikes.

Shanghai, Tokyo, Hong Kong and Sydney refused. Oil prices fell.

Wall Street’s benchmark S&P 500 index fell on Thursday for its biggest one-day loss this year after Federal Reserve Chairman Jerome Powell warned that rates could be raised will cool stubbornly high inflation faster than expected.

Traders eagerly awaited Friday’s U.S. government hiring data after other indicators showed the labor market remained strong despite repeated interest rate hikes. That’s good for workers, but Fed officials worry that rising wages could fuel inflation. This could lead to more rate hikes to reduce business activity and hiring.

Fed officials are “making it clear that rates will move higher,” Rubila Faruqi of High Frequency Economics said in a report.

The Shanghai Composite fell 1% to 3,242.27, while Tokyo’s Nikkei 225 fell 1.7% to 28,143.97. Hong Kong’s Hang Seng fell 2.4% to 19,445.27.

Seoul’s Kospi fell 1% to 2,395.41, while Sydney’s S&P-ASX 200 lost 2.3% to 7,144.70.

India’s Sensex opened down 1.2% at 59,121.10. New Zealand and Southeast Asian markets declined.

On Wall Street, the S&P 500 fell 1.9% to 3,918.32 on Thursday, further paring the gains made earlier this year. About 95% of companies in the benchmark index declined.

Financial group SVB has lost 60% of its value after announcing plans to raise up to $1.75 billion to shore up its financial position amid concerns about rising interest rates and the economy. Bank of America, Citigroup and other major banks fell sharply.

The Dow Jones industrial average lost 1.7% to 32,254.86. The Nasdaq fell 2.1% to 11,338.35.

Earlier this week, Powell said the Fed was ready to raise rates even more if necessary. That raised fears that the Fed and other central banks could push the global economy into at least a brief recession to tame inflation.

A government report on Thursday showed the number of Americans claiming unemployment benefits last week saw the biggest increase in five months, but there were few layoffs.

The yield on two-year Treasuries, which tends to track expectations of future Fed action, fell to 4.87% from about 5.05% just before the unemployment report was released. It hovered at its highest level in 16 years.

A report on Wednesday showed number of vacancies advertised across the country last month was higher than economists expected.

Traders expect the Fed to raise its benchmark lending rate by an unusually wide margin of 0.5 percentage point at its March 22 meeting. That’s more than expected by 0.25 points before Powell’s comments this week, CME Group said.

US inflation rose to 5.4% in January, well above the Fed’s 2% target. The central bank has already raised its key rate to a range of 4.50% to 4.75% from zero in early 2022, the fastest increase in decades.

Companies were cautious about their 2023 outlook.

Shares of General Motors fell 4.9% after joining a long list of companies planning to cut their workforce amid fears of a recession. Many companies are coming off a weak fourth quarter.

Economists expect a drop in profits in the first half of 2023.

JPMorgan Chase fell 5.4% afterward the bank sued its former manager Jess Staley, claiming he helped cover up years of sexual abuse and trafficking by Jeffrey Epstein in order to keep the financier as a client.

In energy markets, benchmark US crude fell 52 cents to $75.20 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell 94 cents in the previous session to $75.72. Brent crude, the benchmark for international oil trading, fell 36 cents to $81.23 a barrel in London. It was down $1.07 to $81.59 in the previous session.

The dollar rose to 136.69 yen from 136.17 yen on Thursday. The euro rose to $1.0588 from $1.0578.

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