Fed, China jitters hit Aust stocks as Asia falls

Markets retreat across region after strong US jobs report puts stimulus tapering timeline back in spotlight, China growth fears persist.

Investors shrugged off a positive Wall Street lead to push the Australian stock market into negative territory after a better-than-expected US jobs report put the Federal Reserve's stimulus tapering timeline back in the spotlight and fears over China's growth persisted.

Markets across Asia fell as materials came under heavy selling pressure, led by gold miners in response to the downward movement in commodity markets.

At the 1615 AEST official market close, the benchmark S&P/ASX200 slipped 0.67% to 4,809.5 points, while the broader All Ordinaries index fell 0.6% to 4,797.6 points.

CMC Markets senior trader Tim Waterer said bourses across Asia lost ground as attention turned to how China's central bank would manage monetary policy in the face of slowing growth in the world’s second largest economy.

"With the US dollar being the prime beneficiary of the robust non-farm payrolls report, the resulting commodity price weakness has impacted the performance of indices such as the ASX-200 where there is a high concentration of resource stocks," he said.

At 1550 AEST, China's Shanghai Composite Index retreated 1.93% to 1968.4 points, while Hong Kong's Hang Seng Index tumbled 2.22% to 20 391.3 points.

Japan's benchmark Nikkei shed 1.15% to 14145.8 points.

IG market analyst Chris Weston said emerging Asian markets took the strong US jobs report as a negative.

"Once again the US bond market is slap bang in the centre of the moves in the capital markets; as the US ten-year had its biggest one-day gain since September 2008 on Friday, Asian investors have started the new week by unwinding further carry positions with strong outflows of emerging markets, with China at the centre," Mr Weston said.

Chinese growth fears were also spooking markets.

"Chinese growth is once again being called into question, and while next week’s Q2 GDP is likely to show the pace of expansion falling to 7.5%, the market is thinking longer term and how a reduction in credit growth north of $100 billion will impact the economy," Mr Weston said. 

On Friday, the Dow Jones Industrial Average jumped 0.98% to 15,135.84 after a US non-farm payrolls report showed 195,000 jobs had been added in June, well above the consensus estimate of 166,000 jobs.

The report reignited fears that the Federal Reserve would start winding back stimulus as early as September.

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