Asian shares follow Wall St lower ahead of US jobs update

BEIJING (AP) – Asian stock markets trailed Wall Street lower on Friday ahead of an update on U.S. jobs amid concerns about possible further interest rate hikes.

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

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

Traders looked ahead to US government employment data on Friday after other indicators showing the labor market has remained strong despite repeated interest rate hikes. That’s good for workers, but Fed officials worry that rising wages could fuel inflation, leading to more rate hikes to cool business activity and hiring.

Fed officials “are clearly signaling that interest rates will move higher,” Rubeela Farooqi of High Frequency Economics said in a report.

The Shanghai Composite Index fell 0.9% to 3,246.16 and the Nikkei 225 in Tokyo fell 1.2% to 28,291.89. The Hang Seng in Hong Kong fell 2.4% to 19,460.27.

The Kospi in Seoul gave up 1.3% to 2,388.58 and Sydney’s S&P-ASX 200 lost 1.8% to 7,181.00.

New Zealand and Southeast Asian markets declined.

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

SVB Financial Group lost 60% of its value after announcing plans to raise up to $1.75 billion to shore up its financial position amid concerns about higher 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 composite fell 2.1% to 11,338.35.

Powell said earlier this week that the Fed was ready to introduce more big rate hikes if necessary. That raised fears that the Fed and other central banks could push the global economy into at least a brief recession to quell inflation.

A government report Thursday showed the number of Americans filing for unemployment benefits last week rose by the most in five months, but layoffs are low.

Yields on the two-year Treasury note, which tend to track expectations for future Fed action, fell to 4.87% from around 5.05% just before the unemployment report was released. It had been hovering at its highest level for 16 years.

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

Traders expect the Fed to raise its benchmark lending rate by an unusually large margin of 0.5 percentage points at the March 22 meeting. That’s up from expectations of 0.25 points before Powell’s comments this week, according to CME Group.

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

Companies have been cautious about their outlook through 2023.

General Motors fell 4.9% after joining a long list of companies with plans to trim its workforce amid fears of a recession. Many companies are coming off a weak fourth quarter.

Economists expect profits to fall through the first half of 2023.

JPMorgan Chase fell 5.4% after the bank sued its former executive Jes Staley, who claims he helped cover up Jeffrey Epstein’s years of sex abuse and human trafficking to keep the financier as a client.

In energy markets, benchmark U.S. crude lost 41 cents to $75.31 a barrel. barrel in electronic trading on the New York Mercantile Exchange. The contract fell 94 cents the previous session to $75.72. Brent crude, the benchmark for international oil trade, fell 33 cents to $81.26 a barrel. barrel in London. It sank $1.07 the previous session to $81.59.

The dollar rose to 136.57 yen from Thursday’s 136.17 yen. The euro rose to $1.0592 from $1.0578.

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