Asian markets follow Wall St but head for annual losses

Asian stocks trailed Wall Street higher on Friday after encouraging US jobs data, but headed for double-digit losses for the year.

Shanghai, Tokyo, Hong Kong and Sydney advanced. Oil prices rose.

Wall Street’s benchmark S&P 500 index rose on Thursday after the number of applicants for unemployment benefits rose only slightly last week, despite repeated rate hikes to slow economic activity and cool inflation.

“Given the sparse market news, the higher slip bears the hallmarks of the dead cat bounce,” Stephen Innes of SPI Asset Management said in a report.

The Shanghai Composite Index rose 0.6% to 3,092.50. The China benchmark is on track to end 2022 down more than 14% after the world’s second-largest economy came under pressure from anti-virus controls and pressure on corporate debt.

Tokyo’s Nikkei 225 Index rose 0.3% to 26,181.11 points. It’s heading towards a loss of about 10% per year. Hang Seng in Hong Kong was 19,918.58, up 0.8%. More than 14% off this year.

Sydney S&P-ASX 200 was up 0.5% to 7,056.60. Sensex in India opened at 61,133.88, up 0.4%. Southeast Asian markets rose, while New Zealand slumped.

South Korean markets were closed for a holiday. The country’s benchmark Kospi index is heading for a loss of more than 25% for the year.

On Wall Street, the S&P 500 was up 1.7% to 3,849.28. The Dow Jones Industrial Average rose 1% to 33,220.80. The Nasdaq composite index was 10,478.09, up 2.6%.

Each major US index is headed for a loss in December. Companies in the S&P 500 posted record profits in 2022, but the index will close the year down nearly 20%, making it the indicator’s biggest annual drop since 2008.

Investors are troubled by a series of rate hikes by the Federal Reserve and central banks in Europe and Asia to rein in decades-high inflation. They worry that central banks are willing to cause a recession if necessary.

The Fed’s core lending rate is in the range of 4.25% to 4.5% after increasing it seven times this year. The US central bank estimates it will reach the 5% to 5.25% range by the end of 2023. The forecast does not require a rate cut before 2024.

In energy markets, reference US crude rose 29 cents to $78.69 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell 56 cents to $78.40 on Thursday. Brent crude, used as the base price for international oil trade, rose 29 cents to $83.75 a barrel in London. It fell to $82.26 a barrel, losing $1 in the previous session.

The dollar fell to 132.56 yen from 132.90 yen on Thursday. The euro fell from $1.0677 to $1.0657.

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