Asian markets are mostly higher after solid US jobs data

November 6, 2022
9:36 pm

AFP NewsNetwork

Asian markets are mostly higher after solid US jobs data

Most Asian markets started the week with gains after strong US jobs data on Monday, although stocks in Shanghai were flat after China announced it would stick to its strict zero-Covid policy.

Global stock markets and oil prices rallied last week on hopes Beijing would roll back some of its economically painful efforts to eradicate the disease from within its borders.

But on Saturday the Chinese government said it would remain “unwavering” in its current plan, which includes strict lockdowns and strict quarantine and testing procedures for even the smallest clusters of cases.

Wall Street stocks were buoyed on Friday by the latest US jobs data, which showed the hiring rate was holding steady and wages continued to rise, albeit at a slower pace.

The data, coming days ahead of the crucial US midterm elections, raised hopes of a soft landing for the world’s largest economy despite aggressive Fed rate hikes aimed at taming inflation.

All three major US indices closed about 1.3 percent higher on Friday, and Tokyo stocks extended those gains on Monday to end the morning session up 1.2 percent.

Hong Kong shares fell slightly at the open but quickly rebounded, rising 1.4 percent – adding to a jump of more than 5 percent in the previous session.

The stock exchanges in Shanghai and Shenzhen hardly changed in morning trading.

“Last week, the financial market was roiled by rumors of a reopening of China,” Raymond Yeung and Zhaopeng Xing of ANZ Research said in a statement on Monday.

However, since the rumors of a reopening were unfounded, “the market is more likely to overinterpret new information and downplay old developments,” they wrote.

“Clearly, China feels the urgency to normalize the economy… But the political leadership will not take over ‘living with Covid,'” the two added.

“In our view, the availability of locally developed new vaccines will be a game changer.”

China is the latest major economy to join a strategy of quenching Covid-19 outbreaks as they occur.

It’s still imposing lockdowns, mass testing and lengthy quarantines — despite widespread disruption to businesses and international supply chains.

Seoul was up 0.8 percent, Taipei was up 1.1 percent and Sydney was up 0.5 percent in early trade on Monday. Singapore was flat and Jakarta fell 0.3 percent.

Dashed hopes of China reopening also drove oil prices lower, which had rallied on Friday on optimism that Beijing may soon change course, boosting demand for crude.