Indian Morning Briefing: Asian markets largely down despite overnight rally on Wall Street

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GLOBAL MARKETS 
DJIA          30530.25    641.47     2.15% 
Nasdaq        11069.30    270.95     2.51% 
S&P 500        3764.79     89.95     2.45% 
FTSE 100       7152.05     30.24     0.42% 
Nikkei Stock  26260.58     14.27     0.05% 
Hang Seng     21424.26   -135.33    -0.63% 
Kospi          2372.59    -36.34    -1.51% 
SGX Nifty*    15592.50    -30       -0.19% 
*Jun contract 
 
USD/JPY   136.19-20   -0.31% 
Range     136.72   136.09 
EUR/USD   1.0510-13   -0.21% 
Range     1.0545   1.0503 
 
CBOT Wheat July   $9.752 per bushel 
Spot Gold   $1,829.05/oz   -0.2% 
Nymex Crude (NY)  $110.65      $1.09 
 
 
US STOCKS 

US stocks rebounded from their worst week since March 2020, giving investors a reprieve from a recent series of seesaw trades that sent stocks and cryptocurrencies tumbling.

The S&P 500 gained 2.5% while the Dow Jones Industrial Average gained 2.2%. The Nasdaq Composite Index jumped 2.5%. Investor appetite for riskier assets followed a tumultuous week in markets, sparked by the Federal Reserve’s approval of a 0.75 percentage point hike in interest rates, the biggest since 1994. .

Meanwhile, investors await further comments from Federal Reserve Chairman Jerome Powell when he testifies before Congress on Wednesday and Thursday.

 
 
ASIAN STOCKS 

Japan’s Nikkei Stock Average was up 0.6% at 26,395.12 in morning trade, supported by gains in U.S. equities overnight on stronger risk sentiment. The yen weakened against the USD to a 1998 low, and was last at 136.32 from 135.13 at Tokyo’s close on Tuesday.

South Korea’s benchmark, the Kospi, fell 0.3% to 2401.10 in mixed early trade after opening higher. Wall Street’s overnight gains helped boost investor sentiment, but lingering fears over inflation and slowing growth still weigh.

Hong Kong stocks were down slightly, showing signs of weakness after a two-day winning streak earlier this week. The benchmark Hang Seng lost 0.4% to 21,479.69. KGI Securities analysts said the Hong Kong market is likely to remain under pressure in the near term, given the strength of the US dollar, rising US interest rates and concerns about a global economic slowdown. While some support may come from Beijing’s stimulus measures, KGI sees limited upside for the HSI for now.

Chinese stocks were mixed after opening higher, trailing other Asian stocks as investors weighed a positive U.S. advance overnight against inflation concerns. The Shanghai Composite Index fell 0.1% to 3305.01, the Shenzhen Composite Index was flat at 2147.59 and the ChiNext Price Index gained 0.8% to 2713.69. “The overnight rebound on Wall Street may provide a positive backdrop for Asian equities, but gains may appear limited by some wait-and-see sentiment, heading into Fed Chairman Jerome Powell’s comments today,” IG market analyst Yeap Jun Rong said in a note.

FOREX 

The dollar weakened against the euro and strengthened against the yen as the stock market rallied overnight and investors took on some risk. Corpay’s chief market strategist Karl Schamotta noted that copper and iron ore prices, often seen as indicators of global growth, fell sharply yesterday. They have fallen over the past month as China’s real estate sector continues to weaken, he said. “Against this backdrop, demand for safe-haven assets, such as the dollar, should remain relatively strong.”

METALS 

Gold prices fell after U.S. stocks rallied overnight in a pullback from last week’s selloff. However, the precious metal could be supported by short-term safe-haven demand as lingering economic concerns could weigh further on equity markets. “Despite the noise of the past week, [gold] remains anchored in the middle of its one-month range,” Jeffrey Halley, senior market analyst at Oanda, said in a note. Halley places gold resistance at $1,860 and support at $1,805.

OIL SUMMARY 

Oil prices fell after rising overnight on concerns about tight global supply. “Investors are growing increasingly nervous that the Fed will feel compelled to react forcefully to high headline inflation and consumer inflation expectations if energy prices rise further,” said Stephen Innes, managing partner of SPI Asset Management, in an email. However, near-term sentiment could be supported by the prospect of the temporary suspension of the U.S. federal gasoline tax, “which is likely to put a smile on American travelers’ faces, increasing demand during the summer driving season,” he said. he added. First-month WTI crude oil futures fell 1.4% to $108.05/bbl, while Brent fell 1.2% to $113.27/bbl.

 
 
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(END) Dow Jones Newswire

June 21, 2022 11:16 p.m. ET (03:16 GMT)

Copyright (c) 2022 Dow Jones & Company, Inc.

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