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Asian markets follow Wall Street rally ahead of jobs data, oil holds gains

A man on a bicycle stops in front of an electronic chart displaying the Nikkei stock index outside a brokerage house in Tokyo, Japan. ―Photo Reuters

Friday 03 June 2022 11:47 MYT

HONG KONG, June 3 – Asian stocks rose on Friday after a strong showing on Wall Street ahead of the release of key U.S. jobs data, while crude held onto most of the previous day’s gains after a rise in production disappointed traders.

A lower-than-expected reading on US private payrolls offered some support in New York, although concerns over inflation and rising interest rates remained major headaches.

While observers said the reading from payroll firm ADP was generally not a good guide to the official report, a subdued number on Friday could give the Federal Reserve some breathing room to mitigate its rate hike and give a much-needed boost to sentiment.

“Apparently, anything that prevents the Fed from following a more aggressive rate hike path seems to be welcomed with open arms by equities,” said Stephen Innes of SPI Asset Management.

For now, the US central bank is expected to continue to tighten monetary policy with half-point hikes in upcoming meetings, while Vice Chair Lael Brainard has warned she won’t. still saw no reason to take a break in the third quarter, as some had hoped. .

Still, a rally in battered tech companies helped drive healthy gains on Wall Street, and Asia managed to follow suit.

Tokyo rose more than one percent, while Sydney, Seoul, Singapore, Wellington and Jakarta were also up, although Manila plunged.

Hong Kong, Shanghai and Taipei were closed for the holidays.

oil pressure

But analysts remain nervous about the near-term outlook due to uncertainty caused by a range of issues, including the war in Ukraine and China’s economic woes.

“We think a slight tilt towards the defensive sectors and away from the growth-oriented areas of this market still makes sense,” said Scott Brown of LPL Financial.

“Apart from this recent rally, very little in this market has changed from a technical standpoint and that prevents us from calling the green light.” Hopes that Opec and other major crude producers could ease pressure on inflation by increasing production were dealt a blow when they agreed to pump just 50% more per month.

The announcement did little to allay concerns about a supply shortage caused by the ban on US and UK imports from Russia, and came just as European leaders announced that they would impose a partial embargo on shipments.

A report showing a sharp drop in US stocks has added to the woes of oil trading rooms, with some commentators saying prices could rise again as China eases long-standing lockdowns in major cities. —AFP