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Indian Morning Briefing: Asian Markets Mostly Higher

DJIA         30677.36   194.23   0.64% 
Nasdaq       11232.19   179.11   1.62% 
S&P 500       3795.73    35.84   0.95% 
FTSE 100      7020.45   -68.77  -0.97% 
Nikkei Stock 26348.52   177.27   0.68% 
Hang Seng    21582.79   308.92   1.45% 
Kospi         2361.68    47.36   2.05% 
SGX Nifty*   15664.00    99.5    0.64% 
*June contract 
USD/JPY  134.81-82   -0.11% 
Range    135.23   134.68 
EUR/USD  1.0536-39   +0.13% 
Range    1.0539   1.0513 
CBOT Wheat July $9.372 per bushel 
Spot Gold     $1,823.03/oz Unch 
Nymex Crude (NY) $104.06  -$2.13 

U.S. stocks advanced amid a second day of testimony from Federal Reserve Chairman Jerome Powell after he warned that rapidly rising interest rates threatened a recession.

On Thursday, the S&P 500 rose 35.84 points, or 1%, to 3795.73. The technology-heavy Nasdaq Composite Index gained 179.11 points, or 1.6%, to 11232.19. The blue-chip Dow Jones Industrial Average rose 194.23 points, or 0.6%, to 30677.36.


Japan's Nikkei Stock Average was 0.2% higher at 26221.63 in early trade, tracking overnight gains in U.S. equities after Fed Chairman Powell's second day of testimony to lawmakers. Inflation was likely to remain closely watched, after Japan's inflation hit 2.5% in May mainly on higher energy prices. The figure has now exceeded the BOJ's 2% target for two straight months. Pharmaceutical stocks were higher, with Shionogi & Co. advancing 2.5% and Chugai Pharmaceutical adding 1.9%. Toyota fell 1.2% after recalling its new battery-powered sport-utility vehicles due to a potential safety risk. The auto maker also said late Thursday that it sold half of its stake in ride-hailing company Uber Technologies.

South Korea's Kospi extended its gains and was recently up 2.2% at 2364.63, led by internet and tech stocks. Gains on Wall Street overnight and bargain hunting after recent losses in the local stock benchmark were helping support investor sentiment. But worries about higher inflation and slower growth were still weighing, limiting the upbeat mood. Index heavyweight Samsung Electronics rose 1.6%. Memory-chip maker SK Hynix was up 1.0%. Internet group Naver gained 2.1%. Biotech company SK Bioscience added 2.6%.

Hong Kong stocks were higher in early trade, following overnight gains on Wall Street, as U.S. treasury yields retreated slightly which typically increase demand for equities. The benchmark Hang Seng Index was 1.2% higher at 21532.10. Local equities may find some support in improving investor sentiment on the broader China market, as Beijing continues to roll out economic stimulus measures, said KGI Securities analysts. But the brokerage said it remained cautious and expected HSI to remain range-bound with relatively low market turnover in the near term.

Chinese shares were higher in early trade, tracking broad gains among other Asian equities. The Shanghai Composite Index rose 0.1% to 3324.39, the Shenzhen Composite Index added 0.2% to 2169.25 and the ChiNext Price Index gained 0.3% to 2768.20. The number of new Covid-19 cases across China has been effectively controlled, which was helping boost investor sentiment, Central China Securities analysts said in a note. The resumption of production has accelerated in various regions in the country, they said. Stocks of Chinese liquor companies were higher, with Kweichow Moutai rising 1.5% and Wuliangye Yibin up 0.9%.


The U.S. dollar strengthened 0.5% against the euro and weakened 1.1% against the yen. The WSJ Dollar Index rose slightly. Going into the second half of the year, dollar-positive dynamics remain in place, where elevated inflation remains perversely positive for currencies as a result of pushing central banks into higher rates, Bank of America's John Shin and Athanasios Vamvakidis said in a note. "Consequently, increasingly aggressive Fed rate hikes have helped USD strength. But with the ECB now likely to belatedly start hiking rates in the second half of the year, we remain focused on 1.05 for our EUR-USD forecast for the rest of 2022, and in general for the USD to stay on the stronger side near-term."


Gold was little changed in early Asian trade after it settled lower overnight in the face of a stronger USD. Choppy trade could be in store for the precious metal. "Market participants appear to be changing their minds almost hourly about whether gold is a safe haven at present," Commerzbank analysts said in a note. Meanwhile, Oanda put resistance for gold at $1,860.00 and support at $1,805.00. Spot gold was barely changed at $1,823.03/oz.


Oil prices were higher in early Asian trade, reversing overnight losses, as demand concerns eased slightly. "Traffic data from China showed that oil demand is improving, with average congestion in 15 Chinese cities currently above January 2021 levels for more than a month," ANZ analysts said in a note. Oanda senior market analyst Jeffrey Halley said he expected oil to behave like inflation, topping out as the year goes on, but not really falling by that much. "A $100 to $120 a barrel medium-term range seems as sensible an outlook as ever," he said. Front-month WTI crude oil futures and Brent were each 0.7% higher at $104.97/bbl and $110.79/bbl, respectively.

Japan Inflation Reaches 2.5% in May 
MSCI Keeps Emerging-Market Rating on South Korea, Despite Push for Upgrade 
Powell Pressed Over How Fed Would Respond to Economic Slowdown 
Big Banks Pass Fed Stress Test 
Energy Secretary Urges Oil Companies to Address High Gasoline Prices 
U.K. Consumer Confidence Fell to Record Low in June 
Ukraine Becomes an Official EU Membership Candidate 
Fed Official Calls for Additional Significant Rate Rises 
Bank of Mexico Steps Up Pace of Interest-Rate Increases 
Merck Pushes Forward With Potential Deal for Seagen 
Vista Exits Datto Investment With $6.2 Billion Sale to Kaseya 
Zendesk Close to Striking Buyout Deal, Sources Say 
Hong Kong Clothing Retailer Giordano Jumps After Buyout Offer 
FedEx Benefits From Higher Shipping Rates, Fuel Surcharges 
Cisco Wins Appeal of $1.9 Billion Patent-Infringement Judgment 
Qantas to Cut Capacity Cuts on High Fuel Prices, Reaffirms Guidance 
McDonald's Tightens Ownership Rules as It Seeks New Franchisees 
Netflix Lays Off About 3% of Workforce in New Round of Cuts 
Intel Delays Groundbreaking Ceremony for Ohio Plant 

(END) Dow Jones Newswires

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

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