Asia’s markets put on a show of resilience on Friday as traders looked to move past a volatile start to the year sparked by the Federal Reserve’s inflation battle plan and continuing pandemic concerns.
News this week that the Fed is planning a more aggressive campaign to fight surging inflation had rattled global traders, who have enjoyed almost two years of cheap cash helping push some markets to record or multi-year highs.
But eyes will now be on the release of key US jobs data later today. The closely watched non-farm payroll figures for December could impact the Fed’s decision on when and how quickly it will lift interest rates.
A US jobs figure way above the forecast 447,000 new posts could force officials to take a more hawkish tilt, which would likely weigh further on equities.
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The Fed’s decision to remove the support put in place at the start of the pandemic comes as the world’s top economy continues to show resilience, with unemployment falling, despite supply chain snarls and rising energy costs that sent prices soaring.
Minutes released Wednesday showed the positive view on the recovery led the US central bank to start hiking interest rates sooner and quicker than expected.
The minutes sent global markets plunging, with tech firms among the worst hit as they are more reliant on debt to fuel growth. Wall Street extended its losses on Thursday, though the selling was less severe.
Asia fared a little better on Friday, with Hong Kong up 1.8%, and Sydney and Seoul rising more than 1% each, while Singapore, Mumbai, Bangkok and Jakarta also rose. Tokyo pared early losses to end flat, with Shanghai, Wellington, Taipei and Manila lower.
The Hang Seng Index in Hong Kong climbed 1.82%, or 420.52 points, to 23,493.38 – leaving it 0.41% up for the week. The Shanghai Composite Index eased 0.18%, or 6.54 points, to 3,579.54, and the Shenzhen Composite Index on China’s second exchange lost 1.15%, or 28.51 points, to 2,452.82.
The benchmark Nikkei 225 index inched down 0.03% or 9.31 points to end at 28,478.56, while the broader Topix index dipped 0.07%or 1.33 points to 1,995.68.
London edged up, Paris was flat and Frankfurt slipped.
Crude Prices Boost
Crude markets built on their recent run-up this week – both contracts have added more than 5% since last Friday – as concerns about the impact of the fast-spreading Omicron Covid-19 variant fade, allowing traders to focus on the demand picture.
While crucial consumer China continues to battle outbreaks by imposing new lockdowns, unrest in producer Kazakhstan and a drop in output from Libya was providing support.
“Oil has rallied in recent weeks as financial markets have dismissed Omicron, rightly or wrongly, as a temporary aberration,” OANDA’s Jeffrey Halley said.
“That momentum accelerated this week, despite OPEC+ hiking production, and now we have Kazakhstan and Libya disruptions adding to the bullishness.”
Bitcoin was also under pressure, falling for a second day to $41,008, a level not seen since the end of September.
Key figures around 0710 GMT
Tokyo > Nikkei 225: FLAT at 28,478.56 (close)
Hong Kong > Hang Seng Index: UP 1.8% at 23,493.38 (close)
Shanghai > Composite: DOWN 0.2% at 3,579.54 (close)
London > FTSE 100: UP 0.1% at 7,455.50
New York > DOW: DOWN 0.5% at 36,236.47 (close)
- AFP with additional editing by Sean O’Meara
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