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Indian Morning Briefing: Asian Markets Mixed; World Bank Cuts China Growth Forecast

DJIA         29260.81  -329.60  -1.11% 
Nasdaq       10802.92   -65.00  -0.60% 
S&P 500       3655.04   -38.19  -1.03% 
FTSE 100      7020.95     2.35   0.03% 
Nikkei Stock 26619.88   188.33   0.71% 
Hang Seng    17823.50   -31.64  -0.18% 
Kospi         2210.24   -10.70  -0.48% 
SGX Nifty*   17072.00    51      0.30% 
*Sept contract 
USD/JPY  144.49-50   -0.17% 
Range    144.75   144.28 
EUR/USD  0.9631-34   +0.25% 
Range    0.9643   0.9585 
CBOT Wheat Dec $8.580 per bushel 
Spot Gold     $1,629.23/oz  0.4% 
Nymex Crude (NY) $76.89   -$1.85 

U.S. stocks extended their decline Monday and the Dow Jones Industrial Average slid into a bear market, reflecting investor concern about the pace of global growth and the price of central-bank efforts to slow inflation.

The Dow's decline of 329.60 points, or 1.1%, to 29260.81, marked its fifth down trading day in a row. The move put the Dow into its first bear market-defined in Wall Street parlance as a drop of 20% or more from a recent high-since the early days of the pandemic.

The S&P 500 fell 38.19 points, or 1%, to 3655.04, hitting a new 2022 low. The Nasdaq Composite, which flitted between gains and losses, slipped 65.00 points, or 0.6%, to 10802.92.

Of the 11 S&P sectors, only consumer staples ticked higher, up less than 0.1%. The declines were driven by energy, real estate and utilities.


Japanese stocks were higher in morning trade, led by gains in auto and electronics stocks following recent selloffs caused by concerns about policy tightening by major central banks. Investors were closely watching the yen and Japanese government officials' comments on the currency. USD/JPY was at 144.33 compared with 143.84 as of Monday's Tokyo stock-market close. The Nikkei Stock Average was up 0.7% at 26620.10.

South Korea's benchmark Kospi was 0.1% lower at 2219.65 in early trade, tracking U.S. stocks which declined overnight on concerns over the pace of global growth amid central banks' efforts to slow inflation. Investors will likely pay attention to developments relating to South Korea's e-payments sector, after Chinese tech giant Ant Group said Monday it would help four Asian e-wallets to expand there. Tech stocks were mixed.

Hong Kong stocks were lower in early morning trade, pulling back from some brief gains after the market opened. The benchmark Hang Seng Index shed 0.1% to 17837.13. IG market strategist Yeap Jun Rong pointed to "resilience in the U.S. dollar, along with a continued rise in yields," which would likely continue pulling funds away from risk assets and put pressure on Asian equities.

Chinese shares rose in early trade, recovering slightly from losses in the previous session, with the Shanghai Composite Index rebounding from a four-month low. Amid recent pressure on oil prices and concerns over the economic outlook, energy companies weakened further. But the auto sector strengthened after the government extended a tax exemption for new-energy vehicles until end-2023. The Shanghai Composite Index added 0.2% to 3058.43, the Shenzhen Composite Index climbed 0.6% and the ChiNext Price Index was 0.7% higher.


Most Asian currencies strengthened against the U.S. dollar in the Asian morning amid risk appetite, driven by gains in U.S. stock futures and due to a likely technical rebound following their recent weakness. However, a further rise in financial-market volatility could lead to more U.S. dollar strength due to its safe-haven status, CBA said in a research note. In particular, Atlanta Fed president Raphael Bostic said the rout in U.K. financial markets will put more stress on the U.S. economy, CBA added. USD/KRW fell 0.2% to 1,427.45, USD/SGD dropped 0.2% to 1.4361 and AUD/USD rose 0.5% to 0.6484.


Gold prices were higher in Asian trade, rebounding after settling at the lowest price in almost two-and-a-half years overnight. However, a stronger USD could continue to weigh on the precious metal. "The move in the dollar is not over and that should keep the pressure on bullion," Oanda senior market analyst Edward Moya said in a note. Meanwhile, ANZ analysts reckoned that investors were the most bearish on gold in almost four years as central banks have increased interest rates to tame inflation. "Its status as a haven asset in times of economic distress has failed to stem the flow of selling," they said in a note. Spot gold rose 0.4% to $1,629.23/oz.


Oil prices were little changed in early Asian trade, after prices overnight fell to their lowest since January. CBA analyst Vivek Dhar reckoned that a synchronized economic slowdown is expected across major commodity consumers globally. "Most of that can be attributed to the forecast of weaker economic growth from higher interest rates to contain inflation," Dhar said in a note. "Crude prices are battling a strong dollar and global recession outlook that will slash crude demand outlooks for the rest of the year," said Oanda senior market analyst Edward Moya in a note. Front-month WTI futures were 0.1% higher at $76.76/bbl while Brent was flat at $84.06/bbl.

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(END) Dow Jones Newswires

September 26, 2022 23:15 ET (03:15 GMT)

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