Indian Morning Briefing: Mixed Asian Markets
GLOBAL MARKETS DJIA 31880.24 618.34 1.98% Nasdaq 11535.27 180.66 1.59% S&P 500 3973.75 72.39 1.86% FTSE 100 7513.44 123.46 1.67% Nikkei Stock 26895.37 -106.15 -0.39% Hang Seng 20388.78 -81.28 -0.40% Kospi 2627.97 -19.41 -0.73% SGX Nifty* 16206.50 31.0 0.19% *May contract USD/JPY 127.76-77 -0.10% Range 128.08 127.64 EUR/USD 1.0665-68 -0.23% Range 1.0696 1.0547 CBOT Wheat July $11.900 per bushel Spot Gold $1,853.87/oz 0.1% Nymex Crude (NY) $110.35 $0.07 US STOCKS
U.S. stocks rose, led by the financial sector, as the S&P 500 moved away from bear market territory after flirting with such low levels in a volatile trading session on Friday.
The S&P 500 advanced 1.9% while the Dow Jones Industrial Average rose 2%. The technology-focused Nasdaq Composite Index rose 1.6%. All 11 sectors of the S&P 500 were up. Financials are doing the best with an increase of 3.7%. JPMorgan Chase rose about 7.3% after offering updated guidance in a presentation and painting a better picture of the economic outlook. The bank said it expects to benefit from loan growth and rising interest rates.
“Overall, the short-term credit outlook, particularly for the US consumer, remains strong,” said Jeremy Barnum, chief financial officer of JPMorgan Chase. Goldman Sachs rose 4.1%, while the KBW Nasdaq Bank Index was ahead 4.7%.
Japan’s Nikkei Stock Average fell 0.1% to 26,966.25 amid continued concerns over rising borrowing, fuel and materials costs. Technology and pharmaceutical stocks led the declines and offset gains from financials and trading companies. The Topix broad stock index rose 0.1% to 1895.97. Investors were focused on the Tokyo summit of the leaders of the United States, Japan, Australia and India later in the day and its implications for global trade.
South Korea’s Kospi fell 0.3% to 2640.44 in early trading, dragged down by losses in internet, technology and auto stocks. Concerns about persistently high inflation, which could dampen economic growth, weighed on sentiment as the Bank of Korea’s main index for inflation expectations among consumers rose for a fourth consecutive month in May to reach a high of almost ten years. Growth stocks fell.
Hong Kong’s Hang Seng index fell 1.3% to 20206.32 after swinging between gains and losses after the open. It was hoped that the United States would lower tariffs on Chinese imports following remarks by President Biden that he was considering such a move. The overnight rise in Treasury yields could also support Hong Kong banking stocks, KGI Research said in a morning commentary. The Hang Seng TECH index fell 1.8% to 4101.47.
Chinese stocks fell in early trading, despite local reports indicating that China will take targeted measures to support its economy amid the pandemic. The Shanghai Composite Index fell 0.1% to 3144.46, the Shenzhen Composite Index fell 0.4% to 1986.16 and the ChiNext Price Index fell 1.0% to 2384.05. Sentiment can be weighed in the short term. “Markets have been glimpsing the impact of regulatory risks and Covid-19 lockdowns on Tencent’s recent lackluster earnings and the potential reflection of weak big tech earnings ahead could prompt caution,” the statement said. IG market analyst Yeap Jun Rong in a note. Auto stocks were mixed.
Most Asian currencies weakened against the USD in the Asian morning session as risk aversion spurred by losses in US equity futures and most regional equity markets added to the attractiveness of the greenback as a safe haven. For Tuesday, sentiment among Asian currencies excluding Japan could be cautious ahead of the FOMC meeting minutes later this week, which could fuel future U.S. rate hike expectations, analyst Jeff Ng said. MUFG Bank’s currency principal, in a research report. USD/KRW rose 0.5% to 1,265.03 and USD/SGD gained 0.2% to 1.3759, while AUD/USD fell 0.5% to 0 ,7074.
Gold prices were higher at the start of Asian trading, supported by a weaker dollar. “If the dollar continues to weaken, gold should find resistance around the $1,885 level,” Edward Moya, senior market analyst at Oanda, said in a note. Further stimulus from China’s central bank and hopes that the US Fed may ease rate tightening should also be positive for gold, Moya added. Spot gold rose 0.1% to $1,853.87 an ounce.
Oil prices were lower at the start of Asian trading. There are signs that the EU’s proposed ban on Russian oil is looking increasingly unlikely, ANZ analysts said in a note. “Hungary resisted the unilateral ban, asking for more time to allow it to find alternative sources,” the analysts noted. However, Stephen Innes, managing partner at SPI Asset Management, said the EU embargo on Russian oil is a matter of “when” not “if”. “We cannot rule out a spike in prices if an embargo occurs alongside an increase in demand due to US seasonal effects and Chinese restrictions ease,” Innes said. First-month WTI and Brent crude each fell 0.6% to $109.60/bbl and $112.72/bbl, respectively.
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(END) Dow Jones Newswire