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Indian Morning Briefing: Asian Markets Decline; China Economic Activity Cooled in August

DJIA           34577.57   -292.06    -0.84% 
Nasdaq         15037.76    -67.82    -0.45% 
S&P 500         4443.05    -25.68    -0.57% 
FTSE 100        7034.06    -34.37    -0.49% 
Nikkei Stock   30350.74   -319.36    -1.04% 
Hang Seng      25166.27   -335.96    -1.32% 
Kospi           3141.25     -7.58    -0.24% 
SGX Nifty*     17404.50     13.5      0.08% 
*Sep contract 
USD/JPY    109.63-64    -0.05% 
Range      109.75   109.55 
EUR/USD    1.1804-07    +0.02% 
Range      1.1815   1.1801 
CBOT Wheat Sep   $6.850 per bushel 
Spot Gold  $1,802.94/oz   -0.1% 
Nymex Crude (NY)    $70.37     -$0.08 

Stocks fell, continuing their recent pullback even after fresh data showed that inflation climbed at a slower pace than economists expected in August.

The S&P 500 declined 0.6%, while the Dow Jones Industrial Average shed 0.8%. The technology-heavy Nasdaq Composite fell around 0.5%. The market has broadly pulled back this month amid concerns that rising cases of the Delta variant of Covid-19 could weigh on economic activity and that stocks have rallied for too long without a correction. Through Monday, the S&P 500 fell in five of the past six trading sessions.

The Labor Department's consumer-price index rose a seasonally adjusted 0.3% in August from July--lower than the 0.4% that economists surveyed by The Wall Street Journal expected.

Investors have been closely following inflation data for signs of whether the Federal Reserve might begin to scale back its easy-money policies. Tuesday's inflation reading appeared unlikely to change the Fed's plans.


Japanese stocks were broadly lower on some profit-taking after the benchmark Nikkei Stock Average hit a 31-year high on Tuesday, and as the yen strengthened on lower U.S. Treasury yields overnight. Investors will focus on any developments over the election of a new-ruling party chief, set for later this month. The Nikkei Stock Average was down 0.6% at 30499.45.

South Korea's Kospi was up 0.2% at 3155.14 in early trade after opening lower, helped by gains in tech and consumer stocks. Tech stocks recovered from some recent regulatory pressure. Focus will likely be on the Bank of Korea's next move, after minutes from the latest policy meeting published Tuesday showed that members of the central bank's rate-setting board said there's a need to conduct a rate increase without delay amid growing risks from financial imbalances.

Hong Kong shares were down in morning trade, driven lower by casino operators after the Macau government laid out plans for the future of the gambling industry, including tighter regulatory scrutiny over casinos. The Hang Seng Index dropped 0.9% to 25277.48, as sentiment was also dragged down by Wall Street's losses overnight. The Hang Seng TECH Index slid 1.5% to 6407.09.

Chinese stocks were lower in early trade, tracking broad declines among other Asian equities. The Shanghai Composite Index was 0.4% lower at 3649.49, the Shenzhen Composite Index was down 0.6% at 2475.03, while the ChiNext Price Index--a measure for emerging industries and startups--was 0.9% lower at 3207.24. The Covid-19 outbreak in China's Fujian province may pressure the country's economic recovery, as China's aggressive measures to tackle the virus based on a zero-Covid policy could result in some near-term economic impact, IG said.


JPY strengthened against G-10 and Asian currencies amid global growth worries, partly caused by mostly worse-than-expected Chinese economic data released Wednesday. The series of data out of China will be a focus today, revealing a further slowdown in the Chinese economy, according to IG, before the data were released. Also, a recent Covid-19 resurgence in China's Fujian province appears to be adding to further risks for the country's recovery, IG added. USD/JPY edged 0.1% lower to 109.59, AUD/JPY dropped 0.3% to 80.07 and SGD/JPY was down 0.1% at 81.56.


Gold declined in early Asia trade, retreating from some overnight gains as USD weakened following the release of U.S. inflation data. Although the precious metal has been riding on the lower-than-expected U.S. CPI print and is back above the key $1,800 level, it remains to be seen if the dollar will regain strength, capping gold's gains, IG said. "This may also come as the timeline for Fed tapering may remain unchanged," it said. Spot gold was 0.1% lower at $1,802.94/oz.


Oil rose in early Asian trade, amid eased concerns over the impact of Tropical Storm Nicholas on crude and natural-gas production in the Gulf of Mexico. Although storm-related power outages briefly shut U.S.'s largest pipeline, which sends oil from Houston to the northeast, its impact on offshore output was relatively limited, ANZ said. Meanwhile, market focus will likely be on the release in inventory from China's strategic oil reserves, ANZ said, noting that Beijing has confirmed that it will make the first sale of crude. Front-month WTI crude oil futures were 0.6% higher at $70.88/bbl, while Brent crude rose 0.5% to $73.99/bbl.

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(END) Dow Jones Newswires

September 14, 2021 23:15 ET (03:15 GMT)

Copyright (c) 2021 Dow Jones & Company, Inc.

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