SYDNEY- Asian share markets mostly eased on Monday after stunningly strong US jobs data soothed concerns about the global economy but also added to the risk of an aggressive tightening by the Federal Reserve.
Geopolitics also remained a worry as the White House warned Russia could invade Ukraine any day and French President Emmanuel Macron prepared for a trip to Moscow.
The cautious mood saw MSCI’s broadest index of Asia-Pacific shares outside Japan dip 0.3 percent. Japan’s Nikkei fell 0.8 percent and South Korea 0.4 percent.
China returned from the Lunar New Year break with jumps in equities and commodities, with the blue-chip CSI300 and Shanghai Composite both up 1.6 percent and 2 percent respectively and metals and iron ore rallying in Shanghai.
Hong Kong’s Hang Seng, which returned from the break on Friday, fell 0.4 percent.
S&P 500 futures and Nasdaq futures both steadied, after last week’s market turmoil saw Amazon.com Inc gain almost $200 billion while Facebook-owner Meta Platforms Inc lost just as much. European futures and FTSE futures each rose roughly 0.5 percent.
BofA analyst Savita Subramanian noted company guidance for 2022 had weakened significantly with most stocks falling following earnings reports.
“Commentaries suggested worsening labor shortages and supply chain issues, with a bigger headwind expected in Q1 than in Q4,” Subramanian said in a note. With wages being the biggest cost component for companies, margin pressure was set to continue.
The January payrolls report showed annual growth in average hourly earnings climbed to 5.7 percent, from 4.9 percent, while payrolls for prior months were revised up by 709,000 to radically change the trend in hiring.
“The report not only indicated that payrolls were way more than anyone could have imagined, but there was exceptional strength in earnings which has to add growing concern among Fed officials about upward pressure on inflation,” said Kevin Cummins, chief US economist at NatWest Markets.
