Asian Stocks Track Wall St Retreat As Oil Prices Surge

Yields surged following a report showing US employers added significantly more jobs than anticipated. While this is positive for job seekers, the robust hiring could sustain economic momentum, potentially driving inflation higher and complicating efforts to manage interest rates

Hong Kong: Asian stocks retreated on Monday after US stocks fell as good news on the job market raised inflation worries. Markets in Japan were closed for a holiday. US futures dropped while oil prices surged more than $1 a barrel after President Joe Biden’s administration expanded sanctions against Russia’s critically important energy sector over its war in Ukraine. The Biden administration said the sanctions announced Friday were the most significant to date against Moscow’s oil and liquefied natural gas sectors, drivers of Russia’s economy.

China reported its exports grew at a faster pace than expected in December, as factories rushed to fill orders to beat higher tariffs that US President-elect Donald Trump has threatened to impose once he takes office. Exports rose 10.7 per cent from a year earlier. Economists had forecast they would grow about 7 per cent. Imports rose 1 per cent year-on-year. Analysts had expected them to shrink about 1.5 per cent. With exports outpacing imports, China’s trade surplus grew to $104.84 billion. But the upbeat data failed to boost the region’s stocks.

Hong Kong’s Hang Seng dropped 1.3 per cent to 18,820.46, while the Shanghai Composite lost 0.5 per cent to 3,154.37. “Adding to the skittish sentiment is the uncertainty over how Asian economies, especially China, will fare under the shadow of the incoming Trump administration’s America First’ trade policies,” Stephen Innes of SPI Asset Management said in a commentary. Australia’s S&P/ASX 200 dipped 1.5 per cent to 8,166.40. South Korea’s Kospi shed 1.2 per cent to 2,486.14.

On Friday, the S&P 500 tumbled 1.5 per cent to 5,827.04, ending its fourth losing week in the last five. The Dow Jones Industrial Average dropped 1.6 per cent to 41,938.45, and the Nasdaq composite sank 1.6 per cent to 19,161.63. Stocks took their cues from the bond market, where yields leaped to crank up the pressure after a report said US employers added many more jobs to their payrolls last month than economists expected.