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

GLOBAL MARKETS 
DJIA         32845.13   315.50   0.97% 
Nasdaq       12390.69   228.09   1.88% 
S&P 500       4130.29    57.86   1.42% 
FTSE 100      7423.43     unch   unch 
Nikkei Stock 27908.81   107.17   0.39% 
Hang Seng    19941.84  -214.67  -1.07% 
Kospi         2459.59     8.09   0.33% 
SGX Nifty*   17252.50    21      0.12% 
*Aug contract 
 
USD/JPY  132.41-42  -0.62% 
Range    133.57   132.08 
EUR/USD  1.0238-41  +0.13% 
Range    1.0243   1.0206 
 
CBOT Wheat Sept $8.076 per bushel 
Spot Gold   $1,763.47/oz   -0.1% 
Nymex Crude (NY) $98.17    $1.75 
 
 
U.S. STOCKS 

U.S. stocks are set to fall on Monday ahead of another busy week of earnings.

On Sunday night, Dow Jones Industrial Average futures were down 133 points, or 0.4%, while the S&P 500 futures fell 0.4%, and Nasdaq Composite futures fell 0.4%.

Major stock indexes rose Friday to end their best month since 2020, clawing back some of their losses from a dismal first half.

The S&P 500 rose 57.86 points, or 1.4%, to 4130.29. The Dow industrials added 315.50 points, or 1%, to 32845.13. The Nasdaq Composite advanced 228.09 points, or 1.9%, to 12390.69. All three gauges ended the week with gains.

The S&P 500 gained 9.1% in July, while the Dow Jones Industrial Average rose 6.7%, the strongest monthly showing for each index since November 2020. The tech-heavy Nasdaq Composite climbed 12% for its best month since April 2020.

Still, the major indexes are deep in negative territory for 2022, after the S&P 500 ended June with its worst first half since 1970. The benchmark is now down 13% for the year.

 
 
ASIAN STOCKS 

The Nikkei Stock Average was flat at 27807.99 as gains in auto and machinery stocks helped offset losses in tech and electronics stocks. Denso rose 3.6% and Isuzu Motors added 2.3%. Sony Group dropped 5.8% after it cut its fiscal-year net-profit view. Fujitsu slid 9.0% after 1Q net profit fell 28% on year. Investors were focusing on earnings and House Speaker Nancy Pelosi's visit to Asia. Astellas Pharma and Shionogi were scheduled to announce their results later in the day.

South Korea's benchmark Kospi edged 0.1% lower at 2448.80 in early trade, as electronics and utilities stocks are retreating. Weaker-than-expected July exports are weighing on investor sentiment, as the country logged a trade deficit for a fourth straight month amid surging energy imports and falling shipments to China, its largest trade partner. Index heavyweight Samsung Electronics falls 0.8% on profit taking after solid gains last week. Memory-chip maker SK Hynix loses 0.6%. State utilities Korea Electric Power and Korea Gas are down 1.3% and 0.9%, respectively. Meanwhile, shipbuilders advance on brisk contract wins. Hyundai Heavy Industries rises 5.2%.

Hong Kong's Hang Seng Index fell 1.1% to 19925.89. Data released Sunday showed China's official gauge of factory activity dropped to 49.0 in July, compared with median estimate of 50.3 from a WSJ survey. Unfavorable factors including the weak China PMI manufacturing index would impact local stock market, said KGI Research in morning commentary. The worst performers on HSI included Country Garden Services falling 9.6%, Country Garden Holdings dropping 4.0% and Alibaba Health Information Technology down 3.6%. Alibaba Group shed 3.7% after the U.S. SEC on Friday added it to a list of Chinese companies at risk of being delisted from U.S. exchanges. The Hang Seng TECH Index was down 1.6% at 4261.20.

Chinese shares were lower in early trade, weighed by electronics and renewable-energy sectors. The government hasn't introduced further measures to stimulate consumption, which fell short of expectations and has led to weaknesses in relevant sectors, Soochow Securities said in a note. Luxshare Precision declined 1.5% and Naura Technology slid 3.8%, while LONGi Green Energy lost 3.0% and Tongwei Co. weakened 2.5%. Coal miners and liquor makers were among the gainers. The Shanghai Composite Index fell 0.7% to 3230.49, the Shenzhen Composite Index was down 0.7% and the ChiNext Price Index was 1.0% lower.

FOREX 

Most Asia and G-10 currencies strengthened against the USD in the Asian morning session amid ongoing prospects for less aggressive Fed tightening. Expectations coalescing around a rapidly slowing U.S. economy hint at less aggressive tightening, said SPI Asset Management managing partner Stephen Innes in an email. Markets have priced out the more jumbo Fed rate-increase scenario, and the recent pullback in Treasury yields has resulted in the unwinding of long USD positions, Innes added. USD/JPY slipped 0.6% to 132.43 and USD/SGD dropped 0.2% to 1.3790 while AUD/USD rose 0.2% to 0.6997.

METALS 

Gold prices edged lower in early Asian trade amid rising Treasury yields, which enhance the allure of USD-denominated fixed-income assets. Last Friday's continued rise in the U.S. employment cost index won't allow the Fed to signal that its rate-increase cycle was done, and there were risks that Fed speakers can push back against market expectations for an early Fed pivot, said TD Securities strategists in a research report. TD Securities said it expected gold's recent rally to ultimately fade. Spot gold was down 0.1% at $1,763.47/oz.

OIL SUMMARY 

Oil prices were lower in early Asian trade amid uncertainty over the outcome of the OPEC+ meeting this week. The group would reportedly consider keeping oil production unchanged for September, despite calls from the U.S. for more supply, but a modest increase in output is also expected to be discussed, said Phillip Securities Research team in its morning commentary. Front-month WTI crude oil futures were 0.7% lower at $97.91/bbl and Brent crude oil futures were 0.6% lower at $103.35/bbl.

 
 
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(END) Dow Jones Newswires

July 31, 2022 23:15 ET (03:15 GMT)

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