Global shares trade mostly higher ahead of a key US jobs report
Market jitters over the possibility that the Federal Reserve might have to keep interest rates higher for longer
PTI
Caution alert for investors on small-cap stocks
Tokyo: Global shares were trading mostly higher Friday as investors looked toward a US jobs report being released later in the day.
France's CAC 40 edged up nearly 0.1 per cent in early trading to 7,321.92, while Germany's DAX was little changed at 15,948.02. Britain's FTSE 100 rose 0.5 per cent to 7,477.41. US shares were set to drift higher with Dow futures up 0.3 per cent to 34,878.00. S and P 500 futures rose 0.2per cent to 4,525.75. Japan's benchmark Nikkei 225 rose 0.3 per cent to finish at 32,710.62. Australia's S and P/ASX 200 slipped 0.4 per cent to 7,278.30. South Korea's Kospi added 0.3 per cent to 2,563.71. The Shanghai Composite added 0.4 per cent to 3,133.25.
Trading was halted in Hong Kong because of an approaching typhoon. Schools and businesses were shut as an official warning was issued about Super Typhoon Saola. Hundreds of flights were cancelled or delayed. Later Friday, the US government will report employment data for August. The strong job market, along with consumer spending, has so far helped thwart a recession that analysts expected at some point in 2023. But they also made the Federal Reserve's task of taming inflation more difficult by fueling wage and price increases.
Stephen Innes, managing partner at SPI Asset Management, said markets were stuck in anticipation ahead of the payrolls data. “Interpreting the data from this week at face value, the perspective of a soft economic landing remains intact. However, notable red flags are emerging from the consumer sector, primarily due to a persistent decline in the savings rate,” he said.
Market jitters over the possibility that the Federal Reserve might have to keep interest rates higher for longer - following reports showing the US economy remains remarkably resilient - led to the market's pullback in August after what had been a banner year. The central bank has raised its main interest rate aggressively since 2022 to the highest level since 2001. The goal has been to rein inflation back to the Fed's target of 2 per cent.
The Fed has maintained that it is ready to keep raising interest rates if it has to, but will base its next moves on the latest economic data. In energy trading, benchmark US crude rose 24 cents to $83.87 a barrel. Brent crude, the international standard, added 21 cents to $87.04 a barrel. In currency trading, the US dollar edged down to 145.49 Japanese yen from 145.52 yen. The euro cost $1.0849, inching up from $1.0846.
