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Indian Morning Briefing: Asian Markets Retreat After Wall Street Fall

GLOBAL MARKETS 
DJIA             29225.61   -458.13    -1.54% 
Nasdaq           10737.51   -314.13    -2.84% 
S&P 500           3640.47    -78.57    -2.11% 
FTSE 100          6881.59   -123.80    -1.77% 
Nikkei Stock     26016.57   -405.48    -1.53% 
Hang Seng        17192.77     26.90     0.16% 
Kospi             2164.11     -6.82    -0.31% 
SGX Nifty*       16738.00     -74.0    -0.44% 
*Oct contract 
 
USD/JPY    144.68-69     +0.18% 
Range      144.78   144.31 
EUR/USD    0.9812-15     -0.01% 
Range      0.9845   0.9794 
 
CBOT Wheat Dec $8.962 per bushel 
Spot Gold  $1,662.60/oz 0.1% 
Nymex Crude (NY) $81.51  -$0.64 
 
 
US STOCKS 

U.S. stocks fell fast and furious, as bond-market turmoil upended broader markets and investors wrestled anew with worries about a global slowdown.

The Dow Jones Industrial Average slid about 1.5%, giving up much of the previous day's gains. The S&P 500 dropped 2.1% and the tech-heavy Nasdaq Composite Index was down 2.8%. The three indexes finished at or near their 2022 closing lows.

Initial jobless claims, a proxy for layoffs, decreased to their lowest level since April, the Labor Department reported. But some investors said that was sending markets down, too: A strong jobs sector could give the Federal Reserve more confidence to keep aggressively raising rates.

 
 
ASIAN STOCKS 

Japanese stocks were lower, dragged by falls in electronics and auto stocks, as concerns persisted about policy tightening by major central banks and the economic outlook. The war in Ukraine was in focus, as Russia prepares to annex four regions of Ukraine following staged referendums. The Nikkei Stock Average was down 1.0% at 26158.18.

South Korea's benchmark Kospi fell 0.5% to 2159.60 in early trade, as tech and internet stocks retreated. Wall Street's declines overnight and the weak earnings outlook for U.S. semiconductor companies were weighing on investor sentiment, Kiwoom Securities analysts said in a note. Foreign and retail investors remained net sellers amid persistent fears of high inflation and a possible recession.

Hong Kong stocks were higher in morning trade, picking up from a flat opening and consistent losses since last week. The benchmark Hang Seng Index gained 0.3% to 17218.43. Chinese property developers led the upturn, as the sector recovered from two days of punishing selloffs after Beijing authorities gave local governments leeway to lower mortgage rates for some buyers. But the market may still suffer some downside, given a weak global macroeconomic backdrop and China's pandemic outbreaks, as well as the continued real-estate crisis, Cinda International analysts said. They reckoned the HSI could drop to around 16473 in the coming weeks.

Chinese shares were slightly higher in early trade ahead of the National Day golden week starting Oct. 1. The benchmark Shanghai Composite Index gained 0.1% to 3044.46, the Shenzhen Composite Index was flat at 1936.74 and the ChiNext Price Index was 0.1% higher at 2333.59. Market reaction to China's PMIs for September will be closely watched, amid persistent concerns over the impact of Covid-19 on consumption and services activities ahead of the 20th National Congress of the Chinese Communist Party next month, Commerzbank analysts said in a note.

FOREX 

Asian currencies weakened against the USD in the Asian morning session amid higher Treasury yields that boost the allure of USD-denominated fixed-income assets. Risky assets don't stand a chance of a meaningful rally if the U.S. economy continues to show resilience while inflation continues to be substantially above the Fed funds rate, said Edward Moya, senior market analyst at Oanda, in an email. The Fed's Mester signaled a recession won't keep the Fed from tightening policy further and the Fed's Bullard reiterated a determination to get rates to a level that can curb inflation, Moya added. USD/KRW rose 0.1% to 1,432.39, USD/SGD edged 0.1% higher to 1.4343, while AUD/USD was down 0.1% at 0.6485.

METALS 

Gold was slightly higher in early Asian trade, rebounding from overnight declines which were weighed by higher U.S. Treasury yields. "Developments coming out of the US may sway the price of gold as the FOMC retains a hawkish forward guidance for monetary policy, and the rising interest rate environment across advanced economies may continue to sap the appeal of bullion as the Fed appears to be on track to carry its hiking-cycle into 2023," said DailyFX strategist David Song in a note. Spot gold was 0.1% higher at $1,662.60/oz.

OIL SUMMARY 

Oil prices were little changed in early Asian trade, as investors mulled over prospects of a production cut next week by OPEC+ amid ongoing worries about the outlook for demand. Market sentiment has been weighed by concerns that oil demand could remain under pressure after the U.S. Fed doubled down on future interest rate increases, ANZ analysts said in a note. "A deteriorating crude demand outlook won't allow oil to rally until energy traders are confident that OPEC+ will slash output at the October 5th meeting," Oanda's senior market analyst Edward Moya said in a note. Front-month WTI futures were 0.1% higher at $81.33/bbl, while Brent was flat at $88.51/bbl.

 
 
TOP HEADLINES 
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Senate Approves Stopgap Funding Bill, Aid to Ukraine 
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Micron Issues Another Muted Outlook After Missing Sales Target 
 
 

(END) Dow Jones Newswires

September 29, 2022 23:15 ET (03:15 GMT)

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