Asian stocks follow Wall Street up

BEIJING (AP):

ASIAN STOCK markets followed Wall Street higher on Friday ahead of a United States (US) job market update that 236,000 jobs were added, a situation traders hope might encourage the Federal Reserve to ease off plans for more interest rate hikes.

Shanghai, Tokyo and Seoul gained. Hong Kong and Australian markets were closed for a holiday.

Traders who worried higher interest rates might tip the global economy into recession were particularly interested in the US government data showing the job market is cooling. They hope that might prompt the Fed to decide aggressive rate hikes are no longer needed to extinguish inflation.

Other data have “confirmed a clear trend that a labour market slowdown has begun”, said Edward Moya of Oanda in a report.

The Shanghai Composite Index gained 0.4 per cent to 3,325.92, and the Nikkei 225 in Tokyo advanced 0.2 per cent to 27,512.81. The Kospi in Seoul rose 1.2 per cent to 2,488.24.

On Wall Street, the benchmark S&P 500 rose 0.4 per cent on Thursday to 4,105.02, after a US government report showed fewer workers filed for unemployment benefits last week.

Friday’s comprehensive non-farm payrolls report show that the number of jobs added by US employers fell to 236,000 last month, from February’s 311,000.

The Dow Jones Industrial Average edged up less than 0.1 per cent to 33,485.29. The Nasdaq composite gained 0.8 per cent to 12,087.96.

The US economy has been slowing under the weight of higher interest rates, but inflation still is higher than the Fed’s two per cent target. That has fed expectations of at least a brief recession this year.

Fed officials say they plan at least one more increase and then will keep rates elevated through at least the start of 2024. However, some traders expect the US central bank to start cutting rates as early as mid-year, to shore up economic growth.

Markets were rattled by last month’s high-profile failures of two US banks and one in Switzerland, but regulators appear to have calmed fears by promising more lending to institutions, if necessary, and other measures to stabilise the global financial system.

There has been more fear in the bond market, where Treasury yields have sunk on worries about a weaker economy and the banking system’s struggles.

The 10-year Treasury yield, or the difference between the market price and the payout at maturity, slipped to 3.29 per cent from 3.31 per cent late on Wednesday, and from more than four per cent last month. The two-year yield is down to 3.82 per cent from more than five per cent last month.

On Wall Street, Costco fell 2.2 per cent after the warehouse membership retailer said an important measure of its sales fell in March, as consumers pulled back spending on big-ticket items.

Levi Strauss fell 16 per cent, despite reporting stronger profit and revenue for the latest quarter than expected. Analysts said some of the sales may have been the result of discounting, pointing to squeezed profit margins.

Benchmark US crude oil for May delivery rose nine cents to $80.70 a barrel on Thursday. Brent crude for June delivery rose 13 cents to $85.12 a barrel.

The dollar edged down to 131.72 yen from Thursday’s 131.77 yen. The euro declined to $1.0919, from $1.0930.