Asian stocks mixed as investors await U.S. jobs data

by Jonathan Adams

KOSPI edged up 0.10%, Shanghai Composite dropped 1.45%, Shenzhen Component shed 1.27%, Hang Seng Index lost 1.4%, Nikkei 225 rose 0.34% and ASX 200 added 0.28%

Stocks in the Asia Pacific were mixed Friday morning on the first trading day of July. Investors await U.S. employment data even as they continue digesting economic data from the U.S. and China.

South Korea’s KOSPI edged up 0.10% by 2 AM GMT. According to data released earlier in the day, the country’s consumer price index increased a lower-than-expected 2.4% year-on-year (YOY) in June.

China’s Shanghai Composite dropped 1.45% and the Shenzhen Component shed 1.27%. The Caixin purchasing managers’ index (PMI) for June, released on Thursday, was also a lower-than-expected 51.3.

Hong Kong’s Hang Seng Index lost 1.4%, with markets reopening after a holiday.

Japan’s Nikkei 225 rose 0.34% and Australia’s ASX 200 added 0.28%.

U.S. shares steadied after the S&P 500 posted its longest winning streak since February 2021. Economic data released on Thursday said that the Institute of Supply Management (ISM) manufacturing PMI was a slightly lower-than-expected 60.6 in June and that a lower-than-forecast 364,000 initial jobless claims were filed throughout the past week.

Investors now await the country’s jobs report for June, including non-farm payrolls, due later in the day. The data is expected to provide clues as to when the U.S. Federal Reserve could begin the asset tapering and interest rate hikes hinted at in June’s policy decision.

Philadelphia Fed President Patrick Harker said cutting asset purchases by $10 billion a month might be reasonable and that he favoured starting the process in 2021, according to a report. The International Monetary Fund also predicted that the central bank could begin asset tapering in the first half of 2022, and hike interest rates later in 2022 or in early 2023.

With economic and earnings growth prospects robust, policy accommodative, and valuations still appealing relative to bonds, we believe the current environment is supportive of further equity gains, UBS Global Wealth Management chief investment officer Mark Haefele said in a note.

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