Strong U.S. jobs data encouraged anticipation of additional interest rate hikes, and dismal factory indicators in China caused Asian stocks to fall along with Wall Street.
BEIJING (AP) — Asian equities fell alongside Wall Street on Thursday as weaker Chinese factory activity and positive U.S. jobs data fueled expectations of more interest rate hikes.
Sydney, Shanghai, Tokyo, and Hong Kong all said no. The cost of oil increased by almost $1/barrel.
Data released by the U.S. government on Tuesday that revealed there were two jobs for every unemployed person in July seemed to bolster claims that the economy can withstand further rate increases to control inflation, which is near multi-decade highs. Due to signs that economic activity is slowing down, some investors had thought the Federal Reserve would take a more relaxed approach.
According to a report by Edward Moya of Oanda, the jobs figures "reinforced the rationale for the Fed to keep to an aggressive strategy."
The Shanghai Composite Indicator dropped 0.9% to 3,197.15 after a manufacturing monthly index revealed that activity shrank once more in August.
In Tokyo, the Nikkei 225 was down 0.6% to 28,039.91, and in Hong Kong, the Hang Seng fell 1.1% to 19,731.49.
The S&P-ASX 200 in Sydney dropped 0.2% to 6,987.00 while the Kospi in South Korea remained constant at 2,451.14.
Singapore and Indonesia declined while New Zealand advanced.
Investors are concerned that raising interest rates by the Fed and other central banks in Europe and Asia to combat an inflation spike could halt global economic expansion.
Jerome Powell, the Fed's chair, said on Friday that the central bank will continue to raise interest rates. This year, the Fed has hiked rates four times. Three times the typical margin, two of those were separated by 0.75 percentage points.
According to Moya, traders seem to be anticipating a 0.75 percentage point increase in September, a half point increase in November, and a 0.25 point increase in December.
Wall Street "could start pricing in rate hikes for February and March if the labor market doesn't crack and the consumer remains resilient," Moya wrote.
The benchmark S&P 500 index on Wall Street dropped 1.1% to 3,986.16, marking a 5.5% decrease over the previous five days.
The Nasdaq composite fell 1.1% to 11,883.14, and the Dow Jones Industrial Average dropped 1% to 31,790.87.
On July 31, according to the U.S. government, there were 11.2 million available positions, up from 11 million in June, which was also revised higher.
Chipmaker Nvidia slumped 2.1%, while tech stocks saw some of the sharpest drops.
On the New York Mercantile Exchange's computerized trading platform, benchmark U.S. crude increased by 89 cents to $92.53 a barrel in the oil sector. On Tuesday, the contract fell by $5.37 to $91.64. International trading benchmark Brent crude increased 93 cents to $98.77 per barrel in London.
From 138.67 yen on Tuesday, the dollar slightly decreased to 138.58 yen. From $1.0021 to $1.0026, the euro increased.
Read more Latest Business News , Today Politics Headline , Today Finace News Update ,Latest Social News Update , World News Highlight , Entertainment Latest News , Today Sports News Update , Education Latest Update , Real Estate Today Update