Asian stocks follow Wall St drop on inflation pressure

By JOE McDONALD, AP Business Writer

BEIJING (AP) — Asian stock markets followed Wall Street lower on Friday after higher-than-expected U.S. inflation dashed hopes that the Federal Reserve could walk away from further interest rate hikes.

Shanghai, Tokyo, Hong Kong and Sydney fell. Oil rose slightly.

Wall Street’s benchmark S&P 500 lost 1.1% on Thursday, adding to declines since the release this week of government data showing August inflation remained near a four-decade high despite four increases interest rate cuts this year to slow the economy.

On Thursday, US government data showed unemployment claims last week fell while consumer sales in August rose. This gives arguments to Federal Reserve officials who say the economy can tolerate more rate hikes.

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Wall Street’s decline indicates ‘no sign of easing risk sentiments’ as labor market data ‘gave the green light for further tightening’ of monetary policy, IG’s Yeap Jun Rong said. in a report.

The Shanghai Composite lost 1% to 3,166.77 after official data showed Chinese consumer and factory activity improved in August but was still weak. Home sales fell 30% from a year earlier under pressure from a government debt crackdown.

The Nikkei 225 in Tokyo fell 1.1% to 27,581.36 and the Hang Seng in Hong Kong fell 0.5% to 18,829.43.

Seoul’s Kospi fell 1% to 2,377.69 and Sydney’s S&P-ASX 200 fell 1.5% to 6,742.90.

The Indian Sensex opened 1% lower at 59,311.07. Markets in New Zealand and Southeast Asia declined.

On Wall Street, the S&P 500 fell to 3,901.35 on Thursday after the Labor Department said the number of jobless claims last week fell to its lowest level in four months.

The market benchmark is down 4.1% for the week after the biggest decline in two years on Tuesday after the government announced that US consumer prices rose 8.3% year on year. previous year and 0.1% compared to July.

The headline figure was down from June’s peak of 9.1%, but core inflation, which excludes volatility in food and energy prices to give a clearer picture of the trend, is rose to 0.6% from the previous month, compared to 0.3% in July.

Traders fear that aggressive interest rate hikes by the Federal Reserve and central banks in Europe and Asia to control rising prices could derail global economic growth. Two of the Fed’s rate hikes this year have been 0.75 percentage points, triple its usual range, and traders expect a similar increase this month.

Fed Chairman Jerome Powell said in August that rates would stay high for some time until the US central bank was confident inflation was under control.

The Dow Jones Industrial Average fell 0.6% to 30,961.82. The Nasdaq slipped 1.4% to 11,552.36.

Retail sales data gave a mixed picture of how US consumers are coping with inflation.

Sales unexpectedly rose 0.3% in August after falling 0.4% in July.

Rail operators mostly rose slightly after an interim labor agreement was reached, averting a disruptive strike. Union Pacific rose 0.2% and Norfolk Southern gained 0.3%. The CSX fell 3.4%.

In energy markets, benchmark U.S. crude rose 24 cents to $85.34 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell from $3.38 on Thursday to $85.10. Brent crude, the price basis for international oil trade, gained 38 cents to $91.22 a barrel in London. It lost $3.26 the previous session to $90.84.

The dollar fell to 143.33 yen from 143.49 yen on Thursday. The euro fell slightly to 99.90 cents from 99.91 cents.

Copyright 2022 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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