Indian Morning Briefing: Asian Markets Broadly Lower; BOJ Keeps Deposit Rate at -0.1%

GLOBAL MARKETS 
DJIA          29927.07   -741.46    -2.42% 
Nasdaq        10646.10   -453.06    -4.08% 
S&P 500        3666.77   -123.22    -3.25% 
FTSE 100       7044.98   -228.43    -3.14% 
Nikkei Stock  25831.24   -599.96    -2.27% 
Hang Seng     21025.11    179.68     0.86% 
Kospi          2425.02    -26.39    -1.08% 
SGX Nifty*    15352.00     42.5      0.28% 
*Jun contract 
 
USD/JPY   133.40-41   +0.94% 
Range     133.44   132.17 
EUR/USD   1.0525-28   -0.22% 
Range     1.0562   1.0524 
 
CBOT Wheat July $10.782 per bushel 
Spot Gold       $1,846.33/oz  -0.6% 
Nymex Crude (NY)  $117.18     $1.87 
 
 
U.S. STOCKS 

U.S. stocks fell sharply Thursday, sending the Dow Jones Industrial Average below 30000 for the first time since January 2021 as volatility continued to rock the market.

The S&P 500 fell 123.22 points, or 3.3%, to 3666.77. The Dow industrials dropped 741.46 points, or 2.4%, to 29927.07. Both indexes ended at their lowest closing levels since December 2020.

The technology-focused Nasdaq Composite slumped 453.06 points, or 4.1%, to 10646.10, its lowest close since September 2020.

Major indexes have notched big declines in 2022 as high inflation, rising interest rates and growing concerns about corporate profits and economic growth dent investors' appetite for risk. The blue-chips are down 18% this year, while the S&P 500 is down 23% and the tech-heavy Nasdaq Composite has fallen 32%.

 
 
ASIAN STOCKS 

Japan's Nikkei Stock Average fell 2.1% to 25870.16, tracking U.S. equities which declined overnight as investors continue to digest the Fed's 75bp rate increase. Investors were waiting for the Bank of Japan's policy decision later today. Aviation stocks were lower on concerns about the recovery of the global economy. JAL slipped 2.9% and ANA Holdings declined 2.1%. Among financial stocks, Mitsubishi UFJ Financial Group skid 1.3% and Sumitomo Mitsui Financial Group dropped 1.2%. Toray Industries rose 0.6% after it established a battery separator film joint venture with South Korean company LG Chem.

South Korea's benchmark Kospi fell 2.0% to 2402.02 in early trade, dragged by losses in electronics, airline and auto stocks. Wall Street's decline overnight and renewed concerns about a global economic slowdown were weighing on investor sentiment, with major global central banks following suit to tighten policy after the Fed's rate increase. Index heavyweight Samsung Electronics fell 2.1%. Flat-screen maker LG Display lost 3.7%. Memory-chip maker SK Hynix shed 1.8%. Budget airlines Jin Air and Jeju Air retreated 4.9% and 4.3%, respectively.

Hong Kong's benchmark Hang Seng Index rose 0.7% to 20989.20, reversing earlier losses, amid falling Treasury yields. The decline in Treasury yields could help to temporarily ease some pressure on the local stock market, said KGI Research in its morning commentary. It expects the HSI to range-trade today. Best performers on the HSI include China Resources Beer climbing 4.0%, Meituan rising 3.5% and Alibaba Health Information Technology gaining 3.4%. Meanwhile, Techtronic Industries falls 4.1% and China Hongqiao Group was down 2.9%. The Hang Seng TECH Index was 1.8% higher at 4630.92.

Chinese shares were mixed in early trade. The Shanghai Composite Index fell 0.3% to 3277.13, the Shenzhen Composite Index declined 0.2% to 2102.34 while the ChiNext Price Index gained 0.2% to 2589.77. China's property sector would likely remain in focus, following recent data showing that property sales in January-May declined 34.5% compared with the same period a year earlier, Commerzbank analysts said in a note. "The health of the property market will be a key determinant of China's economic outlook in the second half of 2022," they added. Among construction stocks, China State Construction Engineering declined 0.4% and Shanghai Construction Group was unchanged.

FOREX 

JPY weakened against G-10 and Asian currencies in the morning Asian session on speculation the BOJ may retain its yield curve control policy in its meeting's outcome later today. Given a somewhat circumspect Fed and a 3 big-figure rally in JPY overnight, this has probably given BOJ Gov. Kuroda enough breathing room to hold tight on YCC for now, said SPI Asset Management managing partner Stephen Innes in an email. Also, USD/JPY turned bid into this morning's Tokyo fixing, and that is typically a local signal to watch, Innes added. USD/JPY climbed 0.9% to 133.42, SGD/JPY rose 0.8% to 96.35 and EUR/JPY was up 0.7% at 140.49.

METALS 

Gold fell in the Asian early morning session amid USD strength, which makes the USD-denominated precious metal more expensive for investors and traders. However, risk-off sentiment prevails across markets, with safe-haven assets such as gold and government bonds possibly benefiting, said Tina Teng, markets analyst at CMC Markets, in an email. Spot gold was down 0.6% at $1,846.33/oz.

OIL SUMMARY 

Oil fell in the early Asian session amid negative market sentiment spurred by Wall Street's overnight losses and continued worries over global economic slowdown. The oil market remains very tight despite fears of aggressive central bank tightening and the slower economic growth that will ensue, said Oanda senior market analyst Edward Moya in an email.'Buy the dip' should probably still work for energy traders, he said. Front-month WTI crude oil futures were 0.8% lower at $116.64/bbl; Brent crude oil futures fell 0.7% to $118.94/bbl.

 
 
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(END) Dow Jones Newswires

June 16, 2022 23:15 ET (03:15 GMT)

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