BEIJING — Asian stock markets sank Monday after strong U.S. jobs data fanned fears of more interest rate hikes to cool inflation.
The Nikkei 225
NIK,
+0.79%
in Tokyo advanced 0.8%. The Hang Seng
HSI,
-2.31%
in Hong Kong sank 2.3% while the Shanghai Composite Index
SHCOMP,
-1.01%
fell 1%.
The Kospi
180721,
-1.13%
in Seoul declined 1.2% and Sydney’s S&P/ASX 200
XJO,
-0.30%
retreated 0.3%.
Singapore
STI,
+0.17%
gained while stocks in Taiwan
Y9999,
-0.98%
and Jakarta
JAKIDX,
-0.46%
retreated. New Zealand financial markets were closed for a holiday.
Wall Street wilted Friday after official data showed U.S. employers hired twice as many people in January as the previous month. That was good news for workers but dampened hopes the Federal Reserve might decide no more rate increases are needed to slow economic activity.
The numbers “look set to inevitably burst the bubble on Fed pivot bets” because they “suggest a re-acceleration in wage pressures,” said Tan Boon Heng of Mizuho Bank in a report.
On Wall Street, the benchmark S&P 500
SPX,
-1.04%
fell 1% on Friday to 4,136.48 after the government reported the economy added 517,000 jobs in January. That was double December’s 260,000 and more than double the 185,000 expected by economists.
Despite that, the S&P 500 turned in its fourth weekly gain in the past five. It is 15.6% above its low point in October.
Average hourly wages were 4.4% higher in January than a year earlier. That was lower than December’s 4.8% raise but above expectations. Central bankers worry wage growth can push up consumer prices.
The data dampened investor hopes that lower inflation might persuade the Fed and other central banks to ease off plans for more rate increases. They worry central bankers might be willing to tip the global economy into recession to stop inflation that is near multi-decade highs.
Some traders expect the Fed to cut rates late this year, despite warnings by officials that more increases are planned. Officials of the European Central Bank have issued similar warnings.
The Dow Jones Industrial Average
DJIA,
-0.38%
dropped 0.4%to 33,926.01. The Nasdaq composite
COMP,
-1.59%
sank 1.6% to 12,006.96.
Also Friday, a separate report showed U.S. service industries returned to growth in January. It was a stronger reading than expected but suggested pricing pressures may be easing.
In energy markets, U.S. benchmark crude
CLH23,
+0.20%
gained 17 cents to $73.56 per barrel in electronic trading on the New York Mercantile Exchange. The contract tumbled $2.49 on Friday to $73.39. Brent crude
BRNJ23,
+0.31%,
the price basis for international oil trading, advanced 25 cents to $80.19 per barrel in London. It lost $2.23 the previous session to $79.94.
The dollar
USDJPY,
+0.42%
rose to 131.88 yen from Friday’s 131.07 yen.