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Asia-Pacific shares struggle as investors react to U.S. data

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Asia-Pacific markets struggled after stocks in the U.S. were back from a sharp sell-off as a strong U.S. jobs report improved optimism for a quicker economic recovery

Markets in the Asia-Pacific struggled for gains by Monday afternoon as investors reacted to last week’s U.S. jobs report that beat expectations and fuelled hopes for a faster economic recovery.

Australian shares finished the session in green but retraced most of their earlier gains. The benchmark ASX 200 added 0.43% to 6,739.60 as most sectors traded higher, with the heavily-weighted financials subindex gaining 0.5%. Major banking and mining stocks were broadly higher: Shares of Commonwealth Bank climbed 1.01% while Rio Tinto gained 2.91%, Fortescue rose 0.5% and BHP advanced 2.38%.

In Japan, the Nikkei 225 reversed gains to end 0.42% lower at 28,743.25 as banking stocks gained. Mitsubishi UFJ Financial Group shares added 2.83%, Sumitomo Mitsui Financial Group rose 2.14% and Nomura shares advanced 3.17%. Elsewhere, the Topix index also gave up earlier gains to close down 0.14% to 1,893.58.

Meanwhile, South Korea’s Kospi shed 1% to 2,996.11. In Hong Kong, the Hang Seng index dropped 1.85% in late-afternoon trade while the Hang Seng Tech index declined 6.69%.

Chinese mainland shares also fell: The Shanghai composite fell 2.3% to 3,421.41 while the Shenzhen component declined 3.81% to 13,863.81. Elsewhere, shares in India and Singapore advanced in afternoon trade.

Monday’s session in Asia-Pacific followed a wild day in U.S. markets last Friday, where stocks were back from a sharp sell-off as a stronger-than-expected nonfarm payrolls report improved optimism for a quicker economic recovery.

Investors remain wary of the impact that the massive Biden fiscal experiment will have on longer-term interest rates, making for a fragile equity environment, analysts at ANZ Research said in a morning note on Monday. That defensiveness may prevail into the mid-March (Federal Open Market Committee) meeting.

The U.S. Senate passed a $1.9 trillion pandemic relief package over the weekend that includes direct payments of up to $1,400 to most Americans. The bill is expected to pass in the Democratic-held House this week and sent to President Joe Biden for his signature before a March 14 deadline to renew unemployment aid programs.

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