Indian Morning Briefing: Asian Markets Generally Lower; Focus on gains, Fed this week
GLOBAL MARKETS DJIA 31899.29 -137.61 -0.43% Nasdaq 11834.11 -225.50 -1.87% S&P 500 3961.63 -37.32 -0.93% FTSE 100 7276.37 5.86 0.08% Nikkei Stock 27701.07 -213.59 -0.77% Hang Seng 20408.44 -200.70 -0.97% Kospi 2396.94 3.80 0.16% SGX Nifty* 16687.00 -38 -0.23% *July contract USD/JPY 136.18-19 +0.06% Range 136.61 135.91 EUR/USD 1.0209-12 -0.05% Range 1.0222 1.0183 CBOT Wheat Sept $7.590 per bushel Spot Gold $1,724.36/oz -0.1% Nymex Crude (NY) $94.66 -$1.69 U.S. STOCKS
U.S. stocks are set to open lower on Monday as a big week of economic data releases and earnings reports kicks off.
On Sunday evening, Dow Jones Industrial Average futures lost 55 points, or 0.2%, while S&P 500 futures lost 0.2% and Nasdaq Composite futures lost 0.2%. slipped 0.1%.
Shares fell on Friday, ending a three-day winning streak, as some surprisingly weak quarterly company updates spooked investors.
The S&P 500 fell 37.32 points, or 0.9%, to 3961.63 a day after the broad benchmark jumped 1%. The Dow Jones Industrial Average edged down 137.61 points, or 0.4%, to 31,899.29, and the Nasdaq Composite fell 225.50 points, or 1.9%, to 11,834.11. Despite Friday’s losses, all three indices posted weekly gains.
With a rise of 2.5% for the week, the S&P 500 capped its best week in a month.
Japanese equities fell, led by electronics and chemical stocks, as caution remains on rising operating costs and their impact on corporate earnings. Yaskawa Electric fell 2.4% and Shin-Etsu Chemical 2.6%. Earnings were the focus, with Shin-Etsu, Canon Inc. and Nissan Motor due to report results this week. USD/JPY was at 136.47, down from 137.90 at Tokyo’s close on Friday. The Nikkei Stock Average was down 0.6% at 27,737.48.
South Korea’s benchmark, the Kospi, rose 0.4% to 2403.03 in early trade, driven by gains by automakers and auto parts suppliers. Foreign investors led the gains. USD/KRW is at 1,311.70, down from Friday’s Seoul market close at 1,313.00. Hyundai Motor rose 2.9%, extending its gains after its upbeat Q2 results last week. Its sister company Kia also gained 2.5%. Automotive suppliers Hanon Systems and Hyundai Mobis rose 3.4% and 2.5% respectively. Meanwhile, electric vehicle battery maker LG Energy Solution fell 2.2% as an IPO lock-in period for institutional investors was due to expire on Wednesday.
Hong Kong’s Hang Seng index fell 0.4% to 20,531.78 in morning trade amid continued headwinds. Investor sentiment is expected to remain weak as the United States and Europe continue to raise rates and Chinese buyers refuse to pay off mortgages for unfinished real estate projects, KGI Research analysts said in a note. The declines include Sunny Optical Technology, down 2.3%, and Alibaba Group Holding, which fell 2.2%, and Sino Biopharmaceutical, which fell 2.1%. Winners include Henderson Land Development, which added 0.7%.
Chinese stocks fell in early trading, extending Friday’s declines as losses by automakers offset gains by property developers. Market confidence may take time to recover after recent large swings, Shanxi Securities said in a note. Aluminum Corp. of China gained 3.5% after agreeing to acquire a larger stake in Yunnan Aluminum. Great Wall Motor and BYD Co. each lost more than 2%, while electric car battery maker CATL fell 1.1%. Among the gainers, Poly Developments added 2.6% and Seazen Holdings rose 2.5%. The Shanghai Composite Index fell 0.2% to 3264.36, the Shenzhen Composite Index was down 0.2% and the ChiNext Price Index was down 0.6%.
Asian currencies were mixed against the USD in Asian trading as US equity futures fall and Treasury yields hold but could weaken this week. Asian currencies excluding Japan are expected to come under pressure ahead of the FOMC meeting, analysts at MUFG Bank said in a research report. The weakness has increased the chances of central bank intervention, especially for currencies such as the INR which are near record highs against the greenback, they said. USD/SGD fell 0.1% to 1.3883. USD/CNY edged up 0.1% to 6.7571 and AUD/USD fell 0.3% to 0.6905.
Gold prices were slightly lower at the start of Asian trading, after posting their first weekly gain in six weeks on Friday. Traders will likely focus on the U.S. Fed’s next interest rate decision, IG market strategist Yeap Jun Rong said in a note. “Whether gold prices can find a more sustainable upside may largely depend on the Fed’s indications of how it expects price pressures to advance their tightening scope,” he added. Spot gold was down 0.1% at $1,724.36 an ounce.
Oil prices were mixed at the start of Asian trading. “A rise in Chinese Covid infections and evidence of declining demand for gasoline in the United States provided the eye candy,” Stephen Innes, managing partner at SPI Asset Management, said in a note. In the short term, the focus would likely be on a rebound in Libyan oil production, as well as expectations of a restart of the Keystone pipeline as early as this week, he added. First-month WTI crude oil futures fell 0.1% to $94.58/bbl and Brent was little changed at $103.16/bbl.
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(END) Dow Jones Newswire
July 24, 2022 11:15 p.m. ET (03:15 GMT)
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