BANGKOK (AP) — Global shares were mostly weaker on Monday, with Chinese markets posting moderate losses after a week-long holiday reopened on news of more lockdowns in China due to rising coronavirus cases. COVID-19.
Shares fell in Hong Kong, Shanghai, Paris and London but rose in Frankfurt. Tokyo markets were closed for a holiday.
The declines followed another dismal weekend on Wall Street as a strong U.S. jobs report added to concerns that the Federal Reserve could view stronger-than-expected hiring data as evidence that the economy has not slowed enough to bring inflation under control. That could mean even bigger rate hikes that could make a recession more likely.
A US consumer price report on Thursday will be one of the main factors for markets this week. Investors are also awaiting the latest updates on how companies are coping with higher prices and interest rate hikes.
The German DAX edged up 0.1% to 12,289.96, while the CAC 40 in Paris slipped 0.5% to 5,837.25. Britain’s FTSE 100 fell 0.5% to 6,956.55.
The futures contract for the S&P 500 lost 0.3% while the contract for the Dow industrials was down 0.2%.
On Friday, the S&P 500 fell 2.8%, ending with a 1.5% gain for the week, its first weekly gain in four weeks. The Dow Jones Industrial Average slipped 2.1%, while the Nasdaq fell 3.8%. The Russell 2000 Index fell 2.9% to 1,702.15.
Markets were closed Monday in Tokyo, Taiwan and South Korea. The Hang Seng in Hong Kong fell 3% to 17,216.66 while the Shanghai Composite Index lost 1.7% to 2,974.15. Bangkok’s SET lost 0.6% and India’s Sensex lost 0.4%.
Chinese cities were imposing more closures and travel restrictions after the number of new daily COVID-19 cases tripled during a holiday week, ahead of a big Communist Party meeting in Beijing next week.
China is one of the few places still resorting to harsh measures to prevent the spread of the disease. The long-ruling Communist Party is particularly worried as it tries to present a positive image of the nation ahead of a party congress every five years that begins on Sunday. The strict “zero-COVID” approach has had an economic impact, especially on small businesses and temporary workers. Many in China hope the pandemic politics will ease after the meeting.
The dollar was trading at 145.43 Japanese yen from 145.34 on Friday evening, adding to pressure on Japan’s central bank to counter the yen’s prolonged decline by adjusting its policy of holding its benchmark interest rate in place. below zero to fight deflation.
The euro slipped to 97.10 US cents from 97.36 cents.
Prices rose in Japan, pushed up mainly by global inflation and soaring oil and gas costs, but the Bank of Japan stuck to its ultra-loose monetary policy while the Fed continued its sharp rate hikes. Higher expected yields pushed the dollar higher against the yen.
The U.S. government report showing employers hired more workers last month than economists predicted could pave the way for the Fed to continue to aggressively raise interest rates, potentially triggering a recession if it does. is done too harshly.
Employers added 263,000 jobs last month, less than July’s hiring pace of 315,000, but still more than the 250,000 expected by economists.
Oil prices also kept pressure on inflation, rising as major oil-producing countries pledged to cut production. On Monday, the US benchmark fell 92 cents to $91.72 a barrel in electronic trading on the New York Mercantile Exchange. On Friday, it posted its biggest weekly gain since March, jumping 4.7% to settle at $92.64 a barrel.
Brent crude, the pricing basis for international trade, fell 45 cents to $97.47 a barrel. It rose 3.7% on Friday to settle at $97.92.
Beyond higher interest rates, analysts believe the next hammer blow to equities could be a potential decline in corporate earnings. Businesses face high inflation and interest rates that eat away at their profits, while the economy slows.