Indian Morning Briefing: Asian markets gain after Fed hikes rates
SUBSCRIBER NOTICE: This newsletter will resume at 0300 GMT Monday. Markets in India are closed on Friday, March 18, in observance of Holi. GLOBAL MARKETS DJIA 34063.10 518.76 1.55% Nasdaq 13436.55 487.93 3.77% S&P 500 4357.86 95.41 2.24% FTSE 100 7291.68 115.98 1.62% Nikkei Stock 26525.04 763.03 2.96% Hang Seng 20876.93 789.43 3.93% Kospi 2702.09 42.86 1.61% SGX Nifty* 17275.50 268.5 1.58% *March contract USD/JPY 118.79-80 +0.04% Range 119.03 118.72 EUR/USD 1.1032-35 -0.01% Range 1.1054 1.1009 CBOT Wheat May $10.692 per bushel Spot Gold $1,934.0/oz 0.4% Nymex Crude (NY) $94.91 -$1.53 US STOCKS
US stocks rose during a volatile session after the Federal Reserve officially announced it would raise interest rates for the first time since 2018.
The S&P 500 ended the day up 2.2%. The technology-focused Nasdaq Composite Index rose 3.8% and the Dow Jones Industrial Average rose 1.6%. The Fed raised interest rates by a quarter of a percentage point as officials seek to prevent the economy from overheating and reduce inflation.
“It really seems like they wanted to send the message that they’re fighting inflation and they’re going to fight it quickly and get it under control,” said Kathy Jones, chief fixed income strategist at the Schwab Center for Financial Research. .
Japan’s Nikkei Stock Average jumped 3.4% to 26644.34, driven by strong gains in chemicals, technology and electronics stocks, as the yen weakened and stocks crude oil prices have fallen. USD/JPY was at 118.99, down from 118.20 at Tokyo’s close on Wednesday. Investors were focused on the impact of a strong earthquake that hit northeast Japan on Wednesday night, as well as headlines about the war in Ukraine.
South Korea’s Kospi rose 1.9% to 2709.85 in early trading, trailing gains on Wall Street. Technology, transportation and energy stocks were higher on expectations that global supply disruptions could ease. Risk appetite was starting, fueled by growing hopes that a diplomatic solution to the Russia-Ukraine war might be possible as negotiators continue ceasefire talks, an analyst at Kiwoom Securities said. USD/KRW fell 0.9% to 1,224.30 as the greenback lost ground against the won on optimism over developments in Ukraine.
Hong Kong’s Hang Seng index rose 5.0% to 21,095.76 on hopes of supportive policies from China. China’s state-run Xinhua news agency reported on Wednesday that Chinese officials said they would introduce market-friendly policies and ensure the smooth functioning of the capital market. This gives a major boost to investor confidence, KGI Research said, referring to the Xinhua report. The Hang Seng TECH index was up 8.7% at 4613.53.
Chinese stocks were higher in morning trading, following a special meeting on Wednesday in which officials made a number of uplifting comments, including pledging support for stock quotes in the morning. Foreign and Capital Markets. They also promised to implement measures to help tame the risks for property developers and said discussions with US regulators regarding ADRs are progressing. The Shanghai Composite Index rose 1.4% to 3216.25, the Shenzhen Composite Index added 1.6% to 2119.23 and the ChiNext Price Index rose 1.9% to 2685 .80.
After peaking on the back of the Fed’s quarter-point rate hike and Powell’s Q&A, the WSJ dollar index was down 0.6% for the day. “The USD rallied broadly after the hawkish dot chart release as US interest rate differentials widened, but the price action then reversed in the press conference,” he said. Bank of America. The firm sees only modest dollar tailwinds from the monetary policy expectations channel “as the market has mostly priced in a Fed path consistent with BofA’s U.S. economic call and, from today, to the dot chart”. Bofa said the war in Ukraine will likely continue to be the main currency driver due to risk sentiment and high commodity prices. “If risk aversion abates, the recent strength in the USD is likely to reverse, especially against the cyclical higher beta exchange rate supported by the recent terms-of-trade improvement.”
Gold edged higher in the Asian morning session after volatile overnight moves caused by the Fed’s first rate hike since 2018. Gold first fell on the Fed’s hawkish statement and economic projections, but pared a fair amount of losses after Fed Chairman Powell signaled that the balance-sheet runoff announcement could come as early as May, Oanda said. Investors don’t have to search hard to find a reason to be defensive and buy gold, Oanda added, citing reasons such as lingering stagflation risks. Spot gold rose 0.4% to $1,934.0 an ounce.
Oil rose in the Asian morning session after an overnight decline that was partly boosted by US government data showing the first increase in domestic crude supplies in three weeks. A one-time increase in US inventory should not be interpreted as demand destruction, although it may ease concerns about tight US supply somewhat, SPI Asset Management said. In addition, one would think that even though once the war in Ukraine is over, sanctions against Russia are likely to continue, making oil supplies harder to come by any longer, SPI Asset Management added. First-month WTI crude oil futures rose 0.6% to $95.65/bbl; First-month Brent was up 0.5% at $98.51/bbl.
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(END) Dow Jones Newswire
March 16, 2022 11:15 p.m. ET (03:15 GMT)
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