Hong Kong Stocks Tumble 3% as Asian Markets Await Key U.S. Jobs Report

Asian stock markets showed a mixed performance on Friday, highlighted by a significant sell-off in Hong Kong, as global investors turned cautious ahead of a crucial U.S. employment report that could influence the Federal Reserve's path on interest rates.

Hong Kong Leads Regional Declines

Hong Kong was the region's worst performer, with the Hang Seng Index plummeting 3% to an 11-week low. The decline came as traders returned from a public holiday to confront a sharp rise in global bond yields and renewed inflation concerns from high oil prices. Technology shares were particularly hard-hit, with the Hang Seng TECH sub-index falling 2.5%.

Other major indexes were varied:

• Japan's Nikkei 225 fell 0.9%, while the broader TOPIX index lost 1.1%.
• Australia's S&P/ASX 200 bucked the trend, rising 0.5%.
• South Korea's KOSPI edged up 0.3%.

Markets in mainland China and India were closed for public holidays.

Spotlight on U.S. Jobs Data

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The primary focus for investors is the U.S. nonfarm payrolls report due later Friday, which is a key indicator of economic health and a major factor in the Federal Reserve's monetary policy decisions. Economists polled by Investing.com expect the U.S. economy to have added 89,000 jobs in September.

The data will shape expectations for future rate hikes. According to the CME FedWatch Tool, markets are currently pricing in a 25% chance of a Fed rate hike in October, a significant drop from 69% a week prior, though a December increase remains fully priced in.

Yields, Oil, and Inflation Weigh on Sentiment

Elevated bond yields remain a key source of pressure on equity valuations. The benchmark U.S. 10-year Treasury yield climbed to 5.34% on Thursday, its highest level since 2002, before easing slightly. The surge in long-term borrowing costs is being felt across global markets.

Adding to inflationary pressures, Brent crude oil prices held above $102 a barrel. In Japan, newly released data showed Tokyo's core consumer price index rose 2.7% year-on-year in September, accelerating from August and exceeding market forecasts. This has increased speculation that the Bank of Japan may need to pursue further interest rate hikes.