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Indian Morning Briefing: Asian Markets Lower After U.S. Stocks Back Off Record Highs

GLOBAL MARKETS 
DJIA             35490.69   -266.19    -0.74% 
Nasdaq           15235.84      0.12     0.00% 
S&P 500           4551.68    -23.11    -0.51% 
FTSE 100          7253.27    -24.35    -0.33% 
Nikkei Stock     28832.69   -265.55    -0.91% 
Hang Seng        25636.70      7.96     0.03% 
Kospi             3030.33      4.84     0.16% 
SGX Nifty*       18262.50       9.0     0.05% 
*Nov contract 
 
USD/JPY    113.58-59 -0.20% 
Range      113.86   113.55 
EUR/USD    1.1608-11  +0.06 
Range      1.1611   1.1590 
 
CBOT Wheat Dec $7.596 per bushel 
Spot Gold  $1,802.10/oz 0.3% 
Nymex Crude (NY) $82.12  -$2.53 
 
 
US STOCKS 

U.S. stocks fell as investors examined earnings results from more of the biggest U.S. companies.

Major indexes wavered between small gains and losses for most of the day's trading. The S&P 500 fell 0.5% as of the 4 p.m. close of trading in New York, a day after the broad stocks gauge closed at an all-time high for the 57th time this year. The Dow Jones Industrial Average-which also closed Tuesday at a record-was down 0.7%, while the technology-focused Nasdaq Composite Index was about flat.

Solid earnings have quelled the investor concerns about supply-chain problems, inflation and Chinese economic growth that rattled markets at the start of fall. The S&P 500 is on course for its biggest monthly advance since November. Additional earnings reports released throughout the week will offer investors more clues about how companies are navigating shortages of workers and raw materials.

 
 
ASIAN STOCKS 

Japanese stocks declined, dragged by companies posting weak results, as concerns continued about a shortage of parts and higher costs of raw materials. Earnings were in focus, with Sony Group Corp.'s results due later in the day. The Nikkei Stock Average was down 1.1% at 28789.89.

South Korea's Kospi gained 0.2% to 3031.89 in mixed morning trade, clawing back losses at the opening bell. Electronics and shipbuilding stocks rose, while energy and travel stocks fell. Index heavyweight Samsung Electronics rose 0.4% after reporting record quarterly revenue and 31% on-year growth in net profit for 3Q, reversing its initial decline at the open.

Hong Kong stocks were higher in morning trade, showing signs of recovery after days of losses. The benchmark Hang Seng Index edged up 0.1% to 25658.81, rebounding slightly from opening declines. Solar-glass maker Xinyi Solar led gains with a 3.6% rise, as sentiment toward the renewable energy industry remained upbeat after strong earnings. But sportswear company Li Ning weighed on the market with a 5.6% drop following plans to place shares at a discount. KGI Securities reckoned the index was unlikely to maintain its upward momentum, citing growing concerns about inflationary pressure and weakness in U.S. stocks. The brokerage expected trading to remain range-bound during the session.

Chinese stocks declined in early trade, partly weighed by auto stocks. The Shanghai Composite Index fell 0.5% to 3545.94 and the Shenzhen Composite Index dropped 0.5% to 2385.97. The ChiNext Price Index--a measure for emerging industries and startups--shed 0.3% to 3299.99. The market's focus will likely be on China's Covid-19 developments, as infections in Beijing are at an eight-month high, IG said. News of a ban on China Telecom's operations in the U.S. may also fuel concerns of more U.S. scrutiny of Chinese tech players and weigh on sentiment, IG said.

 
FOREX 

Some of the current interest-rate fuel for AUD/USD should fade, CBA reckoned, on the basis of its view that current market pricing of RBA interest-rate increases is too aggressive. Australia's 3Q inflation data did raise the risk that the RBA raises its policy rate by end-2022 "but we consider a mid-2022 start is too soon based on our view of the Australian economic outlook, particularly the labour market." CBA also expected the RBA to continue defending the 0.10% yield target for the April 2024 bond, which is a drag for the Australian dollar. AUD/USD has risen 4.1% this month to 0.7519, partly on growing expectations for tighter monetary policy.

 
METALS 

Gold rose in Asian morning trade, recovering slightly from earlier losses. The precious metal seemed to be struggling to maintain gains above $1,800.00, Oanda said, adding that investors will likely turn their attention to next week's FOMC meeting for now. "It is almost certain that a start to the Fed taper will be announced," Oanda said. Spot gold rises 0.3% to $1,802.10/oz.

 
OIL SUMMARY 

Oil declined in early Asian trade, following U.S. government data showing a rise in domestic crude inventories. Further supply could be coming from Iran, as the resumption of nuclear talks between the country and the EU suggests the possibility that it will soon be able to export crude oil again, CBA said. Front-month WTI crude oil futures fall 2.3% to $80.73/bbl. Front-month Brent crude oil futures are 2.6% lower at $82.40/bbl.

 
 
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(END) Dow Jones Newswires

October 27, 2021 23:15 ET (03:15 GMT)

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