Asian stocks follow Wall St drop after strong US jobs data

BEIJING

Asian stocks followed Wall Street’s decline on Wednesday after strong U.S. jobs data fueled expectations of further interest rate hikes and Chinese manufacturing activity weakened.

Shanghai, Tokyo, Hong Kong and Sydney fell. Oil prices rose more than $1 a barrel.

U.S. government data on Tuesday that showed there were two jobs for every unemployed worker in July appeared to support arguments that the economy can tolerate more rate hikes to rein in inflation that is at multi-decade highs. Some investors had hoped the Federal Reserve would pull back on indications that economic activity is slowing.

The jobs data “supported the argument that the Fed should stick to an aggressive stance,” Edward Moya of Oanda said in a report.

The Shanghai Composite Index fell 1.1% to 3,191.00 after a manufacturing index showed a further contraction in activity in August.

The Nikkei 225 in Tokyo fell 0.5% to 28,063.06 and the Hang Seng in Hong Kong fell 0.4% to 19,867.17.

South Korea’s Kospi gained 0.7% to 2,467.38 after July factory output fell 1.3% from the previous month.

Sydney’s S&P-ASX 200 fell 0.2% to 6,984.10. New Zealand rose while Singapore and Indonesia fell. Indian markets were closed for a holiday.

Investors fear that rate hikes by the Fed and other central banks in Europe and Asia to quell a surge in inflation could derail global economic growth.

Chairman Jerome Powell has indicated that the Fed will stick to its rate hike strategy. The Fed has raised rates four times this year. Two of them were 0.75 percentage points, three times the usual margin.

Traders appear to be expecting a rise of 0.75 percentage points in September, half a point in November and 0.25 points in December, according to Moya.

“If the labor market doesn’t break down and the consumer remains resilient, Wall Street may start to price in rate hikes for February and March,” Moya wrote.

On Wall Street, the benchmark S&P 500 fell 1.1% to 3,986.16. This brought its decline over the past five days to 5.5%.

The Dow Jones Industrial Average fell 1% to 31,790.87. The Nasdaq composite lost 1.1% to 11,883.14.

The US government reported that there were 11.2 million jobs open on the last day of July. That was up from 11 million in June, and the June figure was also revised upwards.

Tech stocks were among the biggest decliners. Chipmaker Nvidia fell 2.1%.

In energy markets, benchmark U.S. crude gained $1.02 to $92.66 a barrel in electronic trading on the New York Mercantile Exchange. The contract plunged $5.37 to $91.64 on Tuesday. Brent crude, used to price international trade, rose $1.11 to $98.96 a barrel in London.

The dollar fell slightly to 138.46 yen from 138.67 yen on Tuesday. The euro fell from $1.0021 to $1.0026.