Asian stock markets lower ahead of latest US jobs reading

Asian stock markets were mixed Friday ahead of U.S. jobs data that might reinforce Federal Reserve plans for bigger interest rate hikes to cool surging inflation.

Shanghai advanced while Tokyo, Hong Kong and Seoul retreated. Oil prices rose more than $1.50 per barrel.

Investors looked ahead to U.S. data on August hiring to see how the economy is responding to four earlier hikes to cool inflation that is at a four-decade high. A strong reading would give ammunition to Fed officials who say higher interest rates are needed to slow economic activity and reduce upward pressure on consumer prices.

If the figures show more than 300,000 jobs were added, it “could likely reinforce further lean towards” a rate hike as big as 0.75 percentage points at this month's Fed meeting, said Yeap Jun Rong of IG in a report. That would be three times the Fed's usual margin of change.

The Shanghai Composite Index added 0.1% to 3,187,78 while the Nikkei 225 in Tokyo lost less than 0.1% to 26,644.80. The Hang Seng in Hong Kong sank 0.8% to 19,433.68.

China on Thursday ordered most residents of Chengdu, a city of 21 million people, to stay home following new virus outbreaks. The area is recovering from power rationing after a drought depleted reservoirs for hydroelectric dams, but economists said earlier the national economic impact should be limited because the region's industrial output is small compared with other parts of China.

The Kospi in Seoul advanced 0.4% to 2,406.54 and Sydney's S&P-ASX 200 declined less than 0.1% to 6,839.60.

India's Sensex opened down 0.1% at 58,741.42. New Zealand and Jakarta gained while Singapore and Bangkok declined.

On Wall Street, the benchmark S&P 500 index rose 0.3% on Thursday 3,966.85, rebounding from a four-day string of declines.

The benchmark ended August with a 4.2% loss after surging the previous month on expectations the Fed might ease off rate hikes due to signs U.S. economic activity was cooling and inflation might be leveling off.

Those hopes were dashed last week when chair Jerome Powell said the Fed needs to keep rates elevated enough “for some time” to slow the economy. The only question for many investors is how much and when the next hike will be.

On Thursday, the Labor Department reported unemployment claims fell last week in another sign of a strong job market. It said earlier this week there were two jobs for every unemployed person in July.

The Dow Jones Industrial Average finished up 0.5% at 31,656.42. The Nasdaq slid 0.3% to 11,785.13 for its fifth daily drop.

Health care stocks, companies that rely on direct consumer spending and communications services providers gained. Johnson & Johnson rose 2.5%. Target gained 2.8% and Netflix added 2.9%.

Technology stocks declined.

Nvidia dropped 7.7% after the chip designer said the U.S. government imposed licensing requirements that might disrupt sales to China.

In energy markets, benchmark U.S. crude rose $1.42 to $88.03 per barrel in electronic trading on the New York Mercantile Exchange. The contract tumbled $2.94 to $86.61 on Thursday. Brent crude, the price basis for international oil trading, gained $1.50 to $93.86 per barrel in London. It plunged $3.28 the previous session to $92.36 a barrel.

The dollar rose to 140.34 yen from Thursday's 140.23 yen. The euro gained to 99.72 cents from 99.45 cents.