Asian shares got the week off to a slow start, with mixed trading Monday as China reported wholesale prices fell in June, amid other signs the economy is slowing.
Benchmarks rose in Hong Kong, Shanghai and Mumbai but fell in Tokyo and Sydney. U.S. futures and oil prices declined.
The decline in producer prices by 5.4% in June from a 4.6% drop in May suggests a further weakening of demand in many industries as activity in the world's second largest economy slows and growth in the U.S. and Europe also tapers off under a barrage of interest rate hikes meant to snuff out inflation.
China's economy has slowed faster than hoped after an initial surge in growth as the country bounced back from disruptions caused by the COVID-19 pandemic.
Markets in China tend to react positively to signs of weakness in anticipation of possible stimulus measures that might make more money available for investing in shares.
Hong Kong's Hang Seng gained 0.8% to 18,510.77 and the Shanghai Composite index edged 0.2% higher to 3,202.06.
Tokyo's Nikkei 225 slipped 0.8% to 32,126.15, while the Kospi in Seoul shed 0.1% to 2,525.85. Australia's S&P/ASX 200 declined 0.3% to 7,018.30.
India's Sensex edged 0.2% higher, while the SET in Bangkok was down 0.1%.
As expected, U.S. Treasury Secretary Janet Yellen wrapped up a fence-mending visit to Beijing with no major agreements or breakthroughs in strained ties. But Yellen said relations were on a “surer footing,” and the two sides would continue to talk despite disputes over many issues including access to advanced technologies, Chinese territorial ambitions and allegations of human rights abuses.
On Friday, Wall Street drifted to a mixed finish after data suggested the U.S. job market is still warm enough to keep the economy growing but maybe not so hot that it stokes inflation much higher. U.S. employers added 209,000 jobs last month, a slowdown from May’s hiring of 306,000.
Wage growth held steady last month, instead of slowing as economists expected, for example. While workers would rather have the reported 4.4% gain in average hourly earnings from a year earlier than the 4.2% that was predicted, Wall Street’s fear is the Fed will see too-strong wage growth as keeping upward pressure on inflation.
“Job growth is slowing. Not at all surprising following the massive layoffs happening across the country,” Clifford Bennett of ACY Securities said in a commentary. “In a nutshell, while jobs growth is slowing it is not enough to make the Fed happy by a big margin.”
The S&P 500 lost 0.3% to 4,398.95, though slightly more stocks within the index rose than fell. The Dow Jones Industrial Average gave up 0.6% to 33,734.88, and the Nasdaq composite edged 0.1% lower, to 13,660.72.
The Russell 2000 index of smaller stocks rose 1.2%.
A lot is riding on whether the economy can navigate the narrow pathway to avoid a long-predicted recession. It needs to keep growing despite much higher interest rates instituted by the Federal Reserve to bring down inflation.
Recently, the Fed has been hinting at perhaps two more increases this year before it would hold rates at a high level to ensure inflation returns to its 2% target. The wide assumption on Wall Street is the Fed will hike rates at its next meeting in three weeks.
Treasury yields were mixed following the much anticipated jobs data. The 10-year Treasury yield rose to 4.07% from 4.05% late Friday. It helps set rates for mortgages and other important loans.
In other trading Monday, U.S. benchmark crude oil fell 52 cents to $73.34 per barrel in electronic trading on the New York Mercantile Exchange. It added $2.06 to $73.86 per barrel on Friday.
Brent crude, the pricing basis for international trading, gave up 50 cents to $77.99 per barrel.
The U.S. dollar rose to 142.82 Japanese yen from 142.17 yen. The euro slipped to $1.0958 from $1.0967.
