Indian Morning Briefing: Asian markets mixed amid energy price concerns, Ukraine
GLOBAL MARKETS DJIA 34358.50 -448.96 -1.29% Nasdaq 13922.60 -186.21 -1.32% S&P 500 4456.24 -55.37 -1.23% FTSE 100 7460.63 -16.09 -0.22% Nikkei Stock 27736.27 -303.89 -1.08% Hang Seng 22001.17 -152.91 -0.69% Kospi 2714.03 -21.02 -0.77% SGX Nifty* 17197.50 -58.5 -0.34% *March contract USD/JPY 121.25-26 +0.08% Range 121.29 120.97 EUR/USD 1.0982-85 -0.20% Range 1.1015 1.0983 CBOT Wheat May $11.056 per bushel Spot Gold $1,948.44/oz 0.3% Nymex Crude (NY) $114.58 $5.31 US STOCKS
US stocks fell as worries about rising energy prices, supply shortages and inflation rattled investors again.
The S&P 500 fell about 1.2%, while the Dow Jones Industrial Average fell 1.3%. The technology-focused Nasdaq composite index fell 1.3%. Major U.S. stock indexes jumped on Tuesday as investors shrugged off concerns that inflation could push the domestic economy into a recession.
Some of that confidence faded, however, after Brent, the international benchmark, rose again. Brent crude has jumped 56% this year amid an expanding global economy and worries about supplies due to Russia’s invasion of Ukraine.
Adding to those concerns: Russia said on Tuesday that oil exports via a pipeline from Kazakhstan to the Black Sea could temporarily drop by around 1 million barrels a day – representing about 1% of global oil demand – citing the storm damage. Repairs could take up to two months, Russian officials said.
Japanese stocks were lower in morning trading, led by falling electronics and financial stocks, as overnight gains in crude oil prices stoked concerns over rising commodity costs. Investors remained focused on the war in Ukraine and its impact on commodity prices. Some profit taking began after the Nikkei Stock Average hit a two-month high on Wednesday. The Nikkei Stock Average fell 1.2% to 27,715.77 after rising 3.0% on Wednesday.
South Korea’s Kospi fell 0.6% to 2,717.63 in early trade, led by tech and airline stocks. Renewed worries about rising crude prices and the war in Ukraine weighed on sentiment, an analyst at Kiwoom Securities said, as some investors booked profits on growth stocks after recent gains. Foreign investors were net sellers. USD/KRW was up 0.4% at 1,218.50 on risk aversion.
Hong Kong’s Hang Seng index fell 0.7% to 22022.87, following a weak performance on Wall Street. U.S. markets performed poorly on Wednesday after a sharp rise in oil prices, KGI Securities said. Real estate stocks could come under pressure due to debt concerns, KGI noted.
Chinese stocks were weaker at the start of trade, following broad declines among other Asian stocks. The Shanghai Composite Index fell 0.7% to 3248.84, the Shenzhen Composite Index fell 1.1% to 2138.48. and the ChiNext price index was 1.5% lower at 2675.63. Auto stocks led the declines, after passenger car sales in China fell nearly 30% year-on-year in the third week of March. That suggests the country’s lockdowns have weighed on consumer business, Commerzbank said.
The performance of the NZD/JPY today will be a bit of a litmus test for the New Zealand dollar in general, ANZ said. The NZD/JPY was at 84.46 early today after hitting a seven-year high in the previous session. “It all depends on how well AUD and AUD/JPY perform/commodities’ ability to hold,” ANZ said. “Technically it looks solid.”
Gold rose in early Asian trading as investors continued to seek an increasingly hawkish Federal Reserve while closely monitoring developments in the Russian-Ukrainian war. Strong demand for safe-haven assets such as gold is expected to persist, driven by rising energy prices, which will put additional pressure on inflation, ANZ said. “Gold seems to be attracting the attention of market tourists as there has been a sudden explosion in demand, and it looks like something is brewing,” SPI Asset Management noted. Spot gold was up 0.3% at $1,948.44 an ounce.
Oil prices extended their gains in early trade in Asia, after hitting their highest level overnight in just over two weeks. U.S. crude oil inventories posted a weekly decline amid continued supply issues as the war in Ukraine drags on. A sharp rise in oil prices overnight was also driven by a spike in natural gas prices in Europe, after President Vladimir Putin said Russia would demand payments for natural gas in roubles, ANZ said. . Oil prices could rise further. Markets are still digesting reports that a major Black Sea oil export terminal has halted loadings and faces weeks of disruption, ANZ added. First-month WTI crude oil futures rose 0.3% to $115.26/bbl, while Brent rose 0.5% to $122.45/bbl.
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(END) Dow Jones Newswire
March 23, 2022 11:15 p.m. ET (03:15 GMT)
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