HONG KONG (AFP) – Hong Kong led the charge as most Asian markets posted gains yesterday, shrugging off Wall Street losses ahead of key United States (US) jobs data due soon.
Analysts say signs of a robust American economy, such as strong labour market data this week, are bad news for equities as it gives the Federal Reserve more reason to keep monetary policy tight through to the end of the year and beyond.
US Treasury yields hit their highest levels since 2007 this week as investors fear high borrowing costs for businesses and consumers will eventually drag on the economy.
All eyes are on the monthly US employment data, which will give investors a good idea of whether recent signs of a softening in the labour market will continue.
“European markets look set to open modestly higher ahead of US jobs report,” said chief market analyst at CMC Markets UK Michael Hewson, “which, along with the September CPI report which is due next week could shift the odds significantly on whether we see another rate hike in November”.
“One other reason for the welcome retreat in yields yesterday may well have been the sharp decline in oil prices we’ve seen the past couple of days.”
On Thursday, the Dow Jones Industrial Average finished flat, while the S&P 500 and Nasdaq index ticked lower.
But Hong Kong was on the front foot yesterday, with gains of about 1.5 per cent by the afternoon, though Tokyo closed marginally lower.
Singapore, Seoul and Manila were also up, while mainland Chinese markets were closed for a week-long holiday.
London, Frankfurt and Paris all kicked off with small gains.
Managing partner at SPI Asset Management Stephen Innes said the Asian advances were “thanks partly to a drop in oil prices that benefits Asia’s colossal oil-importing nations”.
“This bounce came after Wall Street closed meekly with weekly unemployment claims holding historically low levels as good news remains paradoxically bad for US stocks,” he added.
