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Indian Morning Briefing: Asian Markets Lower at Start of the Week

GLOBAL MARKETS 
DJIA         33811.40  -981.36  -2.82% 
Nasdaq       12839.29  -335.36  -2.55% 
S&P 500       4271.78  -121.88  -2.77% 
FTSE 100      7521.68  -106.27  -1.39% 
Nikkei Stock 26590.79  -514.47  -1.90% 
Hang Seng    20101.20  -537.32  -2.60% 
Kospi         2662.65   -42.06  -1.56% 
SGX Nifty*   16922.00  -258     -1.50% 
*April contract 
 
USD/JPY 128.33-34   -0.17% 
Range   128.86   128.26 
EUR/USD 1.0779-82   -0.19% 
Range   1.0835   1.0778 
 
CBOT Wheat May $10.654 per bushel 
Spot Gold     $1,928.31/oz  -0.1% 
Nymex Crude (NY) $101.71   -$2.08 
 
 
U.S. STOCKS 

After sharp losses Friday, Wall Street is poised for more declines as stock-index futures slid Sunday night.

Dow Jones Industrial Average futures were last down more than 250 points, while S&P 500 futures were 0.77% lower and Nasdaq-100 futures was down 0.72%.

Worries about slowing corporate earnings and the Federal Reserve's plans to rapidly raise interest rates dragged the Dow industrials to their worst day since 2020 on Friday.

Friday's declines, which deepened throughout the session, undid gains from earlier in the week, extending a slide for stock markets. The broad-based S&P 500 fell at least 1% for the third consecutive week, while the tech-focused Nasdaq Composite Index lost at least 2% for a third straight week. Bond yields extended their gains, rising for three consecutive weeks.

The Dow Jones Industrial Average posted its worst one-day percentage change since October 2020, losing 981.36 points, or 2.8%, to close at 33811.40. The S&P 500 dropped 121.88 points, or 2.8%, to 4271.78, while the Nasdaq Composite fell 335.36 points, or 2.5%, to finish at 12839.29.

 
 
ASIAN STOCKS 

Japanese stocks were broadly lower, dragged by sharp falls in electronics and tech stocks, as concerns persisted over the Fed's pace of tightening. Nidec Corp. fell 5.1% and SoftBank Group was 4.5% lower. Among individual movers, Nissan Motor declined 3.8% following a report that alliance partner Renault was considering selling part of its stake in the Japanese auto maker. Investors were focusing on earnings, as well as movements of USD/JPY and crude oil prices. Chugai Pharmaceutical is due to announce its results later in the day. The Nikkei Stock Average was 2.1% lower at 26528.12.

South Korea's Kospi fell 1.1% to 2674.94 in early trade, dragged by losses in internet and transport stocks. The country's likely slower 1Q GDP growth was weighing on sentiment, which has already been hurt by the U.S. Fed signaling aggressive policy tightening. A WSJ poll shows Korea's 1Q GDP grew 0.6% on quarter, slower than the revised 1.2% gain in 4Q 2021, on weak private consumption. USD/KRW was 0.5% higher at 1,244.70 as risk appetite was receding. Internet group Naver fell 2.3%. Shipping firm HMM declined 2.9%. Index heavyweight Samsung Electronics was 0.6% lower.

Hong Kong shares were lower in morning trade, with the benchmark Hang Seng Index 2.7% lower at 20882.35 amid broad-based losses as China grapples with Covid-19 outbreaks. Expectations of aggressive Fed interest-rate rises were also weighing on Hong Kong equities, analysts from UOB said in a research note. "After the heavy selloff in Wall Street to end last week, overall risk appetite in the region may come under pressure as well," IG market strategist Yeap Jun Rong said in a note. The biggest decliner was China Merchants Bank, which fell 8.2%, followed by Xinyi Solar and Anta Sports, down 6.4% and 6.2%, respectively.

Chinese stocks were lower in morning trade amid concerns over the country's Covid-19 lockdowns, particularly in the financial hub of Shanghai. The Shanghai Composite Index fell 1.8% to 3030.65, the Shenzhen Composite Index dropped 2.2% to 1871.18, while the ChiNext Price Index slid 2.7% to 2234.76. Asian equities may continue to struggle in the final week of April, amid a selloff in the U.S. equities market, UOB analysts said in a note. While the China Securities Regulatory Commission's bid to urge large investors to buy more stocks may limit a selloff, weak sentiment could persist, the analysts said. Auto stocks were lower, with BYD Co. off 1.1% and SAIC Motor down 0.9%.

FOREX 

The yen strengthened against G-10 and Asian currencies amid the possibility of foreign-exchange intervention. U.S. Treasury Secretary Janet Yellen and Japan Finance Minister Shunichi Suzuki discussed a potential coordinated yen-buying intervention at a meeting in Washington, major Japanese broadcaster TBS reported Friday, citing an unnamed Japanese source. The tone on the U.S. side was one of "positive consideration," said Stephen Innes, managing partner at SPI Asset Management. USD/JPY edged 0.1% lower to 128.41, AUD/JPY declined 0.9% to 92.26 and EUR/JPY fell 0.3% to 138.48.

METALS 

Gold ticked down in early Asian trade as investors digested the prospects for more aggressive interest-rate hikes by the Fed to combat rising inflation. Investors were likely to remain focused on developments relating to China's Covid-19 outbreaks, as well as Russia's war in Ukraine. Oanda analyst Jeffrey Halley put support for the precious metal at $1,940/oz and resistance at $1,980/oz. Spot gold was last 0.1% lower at $1,928.31/oz.

OIL SUMMARY 

Oil prices were lower in early Asia trade, weighed by concerns over China's Covid-19 outbreaks and expectations for aggressive interest-rate increases by the Fed. Developments relating to Russia's invasion of Ukraine would remain in focus, as the current situation was adding pressure on the EU to sanction Russian oil, ANZ analysts said in a note. Meanwhile, the U.S. has recently announced fresh sanctions on Russia by banning entry of Russian ships to the U.S. ports, the analysts noted. Front-month WTI crude oil futures were 1.8% lower at $100.24/bbl, while Brent fell 1.9% to $104.65/bbl.

 
 
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(END) Dow Jones Newswires

April 24, 2022 23:15 ET (03:15 GMT)

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