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Indian Morning Briefing: Asian Markets Broadly Lower

DJIA        30076.68  -107.10   -0.35% 
Nasdaq      11066.81  -153.39   -1.37% 
S&P 500      3757.99   -31.94   -0.84% 
FTSE 100     7159.52   -78.12   -1.08% 
Nikkei Stock  Closed 
Hang Seng   18136.43   -11.52   -0.06% 
Kospi        2305.64   -26.67   -1.14% 
SGX Nifty*  17565.00   -75      -0.43% 
*Sept contract 
USD/JPY  142.06-07  -0.21% 
Range    142.60   141.77 
EUR/USD  0.9828-31  -0.08% 
Range    0.9854   0.9825 
CBOT Wheat Dec $9.106 per bushel 
Spot Gold   $1,669.99/oz  -0.1% 
Nymex Crude (NY) $83.43   $0.49 

U.S. stocks dropped following the latest interest-rate increases from the Federal Reserve and other central banks, which have added to fears that the battle to control rising prices could bring a recession.

The S&P 500 lost 31.94, or 0.8%, closing at 3757.99. The tech-heavy Nasdaq Composite declined 153.39, or 1.4%, to 11066.81. The Dow Jones Industrial Average was down 107.10, or 0.4%, to 30076.68.


Markets in Japan were closed Friday for a holiday.

South Korea's Kospi fell 0.6% to 2317.51, tracking Wall Street losses overnight. Central-bank rate increases have continued to weigh on sentiment, said Tina Teng, markets analyst at CMC Markets, in an email, citing rate increases by the Fed, SNB and BOE. Given high inflation, major central banks appeared to be quickening the pace of rate increases, which could lead to a global economic recession, Teng added.

Hong Kong stocks were lower in early trade, extending a downturn along with most Asian equities. The benchmark Hang Seng Index was down 0.4% at 18085.27. Chinese consumer goods companies were leading the declines. Cinda International analysts say they expected the HSI to remain under pressure for a while amid high interest rates globally and political uncertainties in China ahead of the Party Congress in October. They pegged HSI's support level at 17661.

Chinese shares were little changed in early trade. The benchmark Shanghai Composite Index edged up 0.1% to 3111.39, the Shenzhen Composite Index was flat at 1991.82 and the ChiNext Price Index was little changed at 2320.36. Chinese liquor stocks advanced, with Kweichow Moutai rising 0.5% and Wuliangye Yibin gaining 0.1%. China-Taiwan relations could be in focus, following comments by a representative for China's Taiwan Affairs Office that China was willing to make efforts for a peaceful "reunification" with the island.


Most Asian currencies strengthened against the U.S. dollar in the early Asian session, in a likely technical rebound after their broad weakness overnight and after some central banks in the region raised rates on Thursday. There could be calmer foreign-exchange markets today after all of the central-bank moves and updates, said MUFG Bank analysts in a research report. However, USD strength may be difficult to avoid in the near term, they added. USD/SGD edged 0.1% lower to 1.4176 and USD/PHP fell 0.5% to 58.37 while AUD/USD gained 0.1% at 0.6652.

Japan's forex intervention, if sustained, may be able to keep USD/JPY from rising above 145, as the headwind for the yen as a result of U.S.-Japan interest rate differentials will likely abate eventually, Capital Economics economists Thomas Mathews and Jonas Goltermann said in a research note. In the near term, divergent monetary stances seem set to keep piling downward pressure on the yen, they said. Yet, with inflationary pressures starting to ease in the U.S., Capital Economics expects the Fed to be cutting rates by the end of next year, and that U.S. yields will begin falling ahead of that as the Fed turns less hawkish. USD/JPY was recently at 141.91.


Gold was slightly lower in early Asian trade. The precious metal could become a safe-haven as the global outlook deteriorates and as Wall Street grows confident that the peak in Treasury yields is approaching, said Edward Moya, senior market analyst at Oanda, in an email. Gold has huge support at the $1,660/oz level, and if it can stabilize above there, gold prices could eventually rise above the $1,700/oz level, Moya added. Spot gold was recently down 0.1% to $1,669.99/oz.


Oil edged lower in the early Asian trade but may be supported by potential production cuts by OPEC. Nigeria's Minister of State for Petroleum Resources Timipre Sylva has said that OPEC would consider additional output reductions if crude oil prices fall as current levels are affecting the budget of some member states, ANZ Research analysts said in a report, citing a media report. Front-month WTI crude oil futures are 0.4% lower at $83.16/bbl. Front-month Brent crude oil futures are down 0.5% at $90.03/bbl.

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(END) Dow Jones Newswires

September 22, 2022 23:15 ET (03:15 GMT)

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