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

GLOBAL MARKETS 
DJIA         31097.26   321.83    1.05% 
Nasdaq       11127.85    99.11    0.90% 
S&P 500       3825.33    39.95    1.06% 
FTSE 100      7168.65    -0.63   -0.01% 
Nikkei Stock 26111.78   176.16    0.68% 
Hang Seng    21780.59   -79.20   -0.36% 
Kospi         2302.05    -3.37   -0.15% 
SGX Nifty*   15716.50   -28      -0.18% 
*July contract 
 
USD/JPY  134.97-98    -0.18% 
Range    135.41   134.79 
EUR/USD  1.0428-31    +0.04% 
Range    1.0445   1.0418 
 
CBOT Wheat July $8.312 per bushel 
Spot Gold     $1,810.23/oz Unch 
Nymex Crude (NY) $108.04   $2.28 
 
 
U.S. STOCKS 

A day after closing out the index's worst first half of any year since 1970, the S&P 500 on Friday clawed its way into the green after early losses but still finished the week down 2.2%. It has now fallen for 11 of the past 13 weeks.

The S&P 500 gained 39.95 points, or 1.1%, to 3825.33. The tech-focused Nasdaq Composite Index rose 99.11 points, or 0.9%, to 11127.85. The Dow Jones Industrial Average climbed 321.83 points, or 1%, to 31097.26.

 
 
ASIAN STOCKS 

Japanese stocks were higher, led by gains in tech and auto stocks, thanks partly to easing of concerns about higher borrowing costs. SoftBank Group added 4.0% and automaker Subaru was 3.1% higher. Meanwhile, KDDI fell 2.1% after it reported nationwide mobile service disruption. Insurance stocks were lower following drops in U.S. Treasury yields on Friday. Investors were focusing on movements of bond yields and crude-oil prices. The Nikkei Stock Average was 1.0% higher at 26192.40.

South Korea's benchmark Kospi was 0.3% higher at 2312.98 in early trade, supported by tech, airline and gaming stocks. Retail and institutional investors lead the gains, hunting for bargains after a three-session losing streak. Biotech firm SK Bioscience rose 2.9% after the approval of its Covid-19 vaccine last week for use in the country. Budget airline Jin Air advances 2.6%. Local casino operator Kangwon Land gained 5.2% on hopes for solid earnings recovery. Index heavyweight Samsung Electronics was 0.5% higher. Memory-chip maker SK Hynix added 0.5%. Chip-making equipment maker Hanmi Semiconductor gained 1.2% after securing new contracts.

Hong Kong stocks were lower in morning trade as the market resumes trading after a holiday on Friday. The benchmark Hang Seng Index sheds 0.7% to 21710.75. KGI Securities analysts point out that rising concerns of a recession in the U.S. would likely keep investor sentiment and stock-market momentum down globally in the near term. But Hong Kong equities may find some support from a recent decline in U.S. treasury yields, as well as China's continued economic stimulus measures. A mixed bag of companies were down early in the session, with HKEX off by 4.5% and Wharf Real Estate Investment Co. falling 4.1%.

Chinese shares were lower in early trade, weighed by losses in liquor stocks. The Shanghai Composite Index fell 0.3% to 3378.30, the Shenzhen Composite Index declined 0.3% to 2213.44 and the ChiNext Price Index was off 0.4% to 2771.73. While Friday's Wall Street gains may provide a positive backdrop for the Asia session, gains could be capped due to a weak start for U.S. futures and China's rising Covid-19 cases, IG market analyst Yeap Jun Rong said in a note. "Further tightening measures were implemented across some cities in Anhui province, which could take the spotlight amid the quiet economic calendar," he added. Kweichow Moutai fell 1.3% and Wuliangye declined 1.6%.

FOREX 

Asian currencies were mixed against USD in the morning Asian session, and may weaken amid faltering risk appetite spurred by worries over global economic growth. Market sentiment remained fragile and uncertain as investors grapple with signals from recent drop in sovereign bond yields in the U.S. and Europe, Commerzbank analysts said in a research report. The question is whether this indicates a peak in inflation or increasing risks of a slowdown, the analysts said. Investors may get some clues from Fed minutes and the U.S. employment report due this week, they said. USD/KRW fell 0.1% to 1,297.08 while AUD/USD was down 0.1% at 0.6806 and USD/CNH was little changed at 6.6988.

METALS 

Gold was little changed in early Asian trade after being pressured on Friday following India's decision to raise import duties for refined gold. "This could weaken demand just as outflows from gold-backed ETFs pick up," ANZ analysts said in a note. "We will likely need to keep an eye on how two-year yields impact the U.S. dollar, given gold's strong inverse relationship to the greenback as a primary signal that the market thinks the Fed may tap the rate hike breaks a touch," SPI Asset Management managing partner Stephen Innes said in a note. Spot gold was barely changed at $1,810.23/oz.

OIL SUMMARY 

Oil prices were lower in early Asian trade, amid demand concerns spurred by recession fears. However, oil prices may be supported in the near term due to tight supply. "With OPEC+ opting to raise production by 648,000 [bpd] again in August but not comment beyond then, there is a cloud of uncertainty over the supply side again," Oanda's senior market analyst Craig Erlam said in an email. "The tight market is here to stay and the only real case for significant price declines is a recession, sadly," he added. Front-month WTI crude oil futures and Brent were each 0.3% lower at $108.11/bbl and $111.29/bbl, respectively.

 
 
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(END) Dow Jones Newswires

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

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