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Asian shares up on doubts of Fed rate hike this month

Published 10/05/2015, 02:45 AM
Updated 10/05/2015, 02:49 AM
© Reuters.  Shares in Asia gain with China shut

Investing.com - Asian shares gained on Monday as China remained shut and investors looked ahead to more Federal Reserve insight this week after disappointing jobs data last week raised doubts about a rate hike this month.

The S&P/ASX 200 rose 1.95%, while the Nikkei 225 gained 1.58%.

In Japan average cash earnings for August rose 0.5%, a second straight rise, but below the gain of 0.7% expected.

The average wages are likely to rebound in the July-September quarter after dipping 0.7% on year in April-June, when the economy contracted on sluggish consumer spending and business investment amid a slow recovery in real wages, high import costs and uncertain global growth.

Earlier, the TD-MI September inflation gauge in Australia rose to a gain of 0.3% month-on-month, from a gain of 0.1% in August.

"Our tradable- and domestic-inflation gauges are converging toward an annual rate of 2% - phenomena that the RBA has already anticipated whereby the weaker Australian dollar may be boosting imported prices but benign domestic inflation provides an offset," TD Securities Asia-Pacific macro strategist Annette Beacher said.

In the week ahead, investors will be focusing on Wednesday’s minutes of the Fed’s September meeting, when the central bank decided to delay hiking rates.

Central bank meetings in Japan, Australia and the U.K. will also be closely watched.

On Monday, markets in China are to remain closed for a national holiday.

The U.K. is to release data on service sector activity.

In the euro zone, the eurogroup of finance ministers are to hold talks in Brussels.

The Institute of Supply Management is to release data on service sector activity.

Last week, U.S. stocks were higher after the close on Friday, as gains in the Oil & Gas, Basic Materials and Healthcare sectors led shares higher.

At the close in NYSE, the Dow Jones Industrial Average gained 1.23%, while the S&P 500 index gained 1.43%, and the NASDAQ Composite index gained 1.74%.

On Friday, data showed that the U.S. economy added far fewer jobs than expected last month indicated that interest rates are likely to remain on hold until early next year.

The Labor Department reported that the U.S. economy added just 142,000 jobs last month, well below expectations of the 201,000 expected by economists.

August’s reading was revised down to 135,000, from the initial reported figure of 173,000.

Average hourly earnings were flat month-on-month and the labor force participation rate fell to just 62.4%, down from 62.6% in August. The unemployment rate was unchanged at 5.1%, in line with forecasts.

The report underlined fears that a slowdown in global economic growth has spread to the U.S. economy and prompted investors to push back expectations on the timing of an initial rate hike by the Federal Reserve to early 2016.

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