Asian equities were broadly lower as investors exercised caution ahead of the US nonfarm payrolls data, which is expected to shape the Federal Reserve’s monetary policy outlook.
Global financial markets have experienced volatility at the start of the year, with rising Treasury yields reflecting moderated expectations for Fed rate cuts.
Concerns over a slowdown in Chinese economic growth further exacerbate the cautious sentiment in Asia.
Nikkei extends losses to third day
The Nikkei 225 Index in Japan also faced losses, declining 0.49%, to 39,411.76.
Weakness was observed across most sectors, with index heavyweights and financial stocks leading the decline, while technology stocks were a rare bright spot.
SoftBank Group lost nearly 1%, and Fast Retailing fell almost 7% following disappointing results in China.
Household spending data for November surpassed expectations, reflecting robust wage growth from earlier in 2024.
China and Hong Kong markets remain in the red
In China, the Shanghai Shenzhen CSI 300 and Shanghai Composite indexes both fell around 0.3%, while Hong Kong’s Hang Seng index remained flat.
All three indexes were on track for weekly losses, with the Hang Seng down 2.2%, weighed by Tencent Holdings’ addition to a US blacklist.
This move, undertaken by the Biden administration, raised concerns about escalating tensions between the US and China ahead of the incoming Trump administration.
Weak inflation data in China further dented sentiment, though it also spurred hopes for additional stimulus measures from Beijing.
Other Asian markets
The Australian stock market was down during mid-market trading on Friday, adding to the losses from the previous session despite opening in the green.
The benchmark S&P/ASX 200 Index fell 50.40 points, or 0.61%, to 8,278.80, with a low of 8,262.20 earlier.
Among major miners, BHP Group and Rio Tinto posted gains of nearly 1% and 2%, respectively, while Mineral Resources and Fortescue Metals edged lower.
South Korea’s KOSPI was trading flat at the time of writing. Foreign investors and institutions were net sellers, offloading 61.4 billion won and 355.3 billion won, respectively, while individual investors purchased 387.1 billion won.
The top stocks by market capitalization on the KOSPI showed mixed performance, with Hyundai Motor and Kia gaining 5% and 2.5%, respectively, and SK Hynix rising 1.5%.
Wall Street’s struggles on Thursday
The major US indices closed the session narrowly mixed after spending the day oscillating across the unchanged line.
The Nasdaq dipped slightly, losing 10.80 points or 0.1% to finish at 19,478.87. Meanwhile, the Dow gained 106.84 points or 0.3%, settling at 42,635.20.
The S&P 500 posted a modest increase of 9.22 points or 0.2%, ending at 5,918.25.
Several Fed officials reiterated on Thursday that interest rates are likely to remain at current levels for an extended period, with cuts contingent on meaningful progress in reducing inflation.
The US jobs data, due Friday, is expected to show a deceleration in hiring, with forecasts suggesting an addition of 155,000 jobs in December.
The unemployment rate is projected to hold steady at 4.2%, and average hourly earnings growth is anticipated to cool slightly.
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