GLOBAL MARKETS DJIA 33129.59 -697.10 -2.06% Nasdaq 11492.30 -294.97 -2.50% S&P 500 3997.34 -81.75 -2.00% FTSE 100 7977.75 -36.56 -0.46% Nikkei Stock 27091.77 -381.33 -1.39% Hang Seng 20399.72 -129.77 -0.63% Kospi 2424.08 -34.88 -1.42% SGX Nifty* 17863.00 -83 -0.46% *Mar contract USD/JPY 134.81-82 -0.15% Range 135.06 134.57 EUR/USD 1.0659-62 +0.13% Range 1.0666 1.0647 CBOT Wheat March $7.505 per bushel Spot Gold $1,835.74/oz 0.1% Nymex Crude (NY) $76.16 -$0.18 US STOCKS
U.S. stocks dropped, dragged down by a disappointing forecast from Home Depot and growing concerns that the Federal Reserve will keep interest rates higher for longer.
The S&P 500 was down 2%, while the Dow Jones Industrial Average fell 2.1%. The technology-focused Nasdaq Composite Index dropped 2.5%. All 11 sectors of the S&P 500 traded lower, as did 28 of the 30 stocks in the Dow.
Home Depot's fall shaved 145 points off the Dow and weighed on the consumer-discretionary segment of the S&P 500, which dropped more than 3% as the index's weakest link.
"We keep seeing this pattern of exuberance and then disappointment," said Susannah Streeter, head of money and markets at Hargreaves Lansdown. Once the Fed pauses interest-rate increases, she added, "I think we will see markets calm, but until then we are going to see big cycles of volatility."
ASIAN STOCKS
Japanese shares were lower, dragged by declines in electronics and tech stocks, as concerns persisted over the Fed's further tightening. Investors are focusing on the yen, bond yields and any policy-related developments. The Nikkei Stock Average was 1.0% lower at 27201.80.
South Korea's benchmark Kospi fell 1.2% to 2429.55 in early trade, tracking Wall Street's decline overnight on growing concerns that the Fed could keep interest rates higher for longer. Tech and financial stocks led the retreat. Foreign and institutional investors were net sellers. Trading is lackluster as investors remain cautious ahead of the Bank of Korea's rate decision Thursday. USD/KRW was 0.6% higher at 1,303.90. Meritz Financial Group slumps 5.4%.
Hong Kong's benchmark Hang Seng Index was 0.1% lower in early trade, following a Wall Street selloff overnight amid growing concern over the likelihood that the U.S. Fed will keep raising interest rates. Tech stocks continued to fall as competition intensifies among Chinese tech giants amid reports that JD.com is planning to offer subsidies for stores operating on its platform, which could pressure margins. The Hang Seng Tech Index was 1.0% lower.
China stocks dropped in morning trade, pulling back from Tuesday's gains as the market's rangebound pattern persisted. The benchmark Shanghai Composite Index was down 0.4% at 3293.49, while the Shenzhen Composite Index also shed 0.4%, at 2156.91. The ChiNext Price Index declined 0.8% to 2450.67. Huaxi Securities analysts said the muted trading trend is likely to drag on in the near term, as the market consolidates after a strong rally in January. But upside remains in the longer run, as an expected reopening-driven macroeconomic rebound supports companies' earnings recovery and will likely push up valuations, the brokerage projected.
FOREX
JPY strengthened against G-10 and Asian currencies in the Asian morning session on risk-off sentiment, which enhances the appeal of the Japanese yen. There is risk aversion regarding U.S. rate increases, MUFG Bank senior currency analyst Jeff Ng said in a research report. Geopolitical concerns are also increasing after Russian President Vladimir Putin said Moscow would step back from the last remaining major nuclear-arms-control treaty between the U.S. and Russia. USD/JPY fell 0.2% to 134.70, AUD/JPY dropped 0.5% to 92.05 and EUR/JPY was down 0.2% at 143.54.
METALS
Gold edged higher in early Asian trade. The U.S. dollar will likely remain the main driver of gold prices, given that the rise and fall in gold futures have broadly tracked in line with the inverse movements in the greenback and U.S. 10-year real yields, said CBA analyst Vivek Dhar in a note. "The US dollar will eventually give up its recent gains as the US economy faces more strain from interest rate rises," he said, adding that a weaker USD should help gold prices rise from current levels. Spot gold was 0.1% higher at $1,835.74/oz.
OIL SUMMARY
Oil prices were lower in early Asian trading. Crude prices appear to be struggling, weighed by renewed concerns about global growth following soft European manufacturing-activity data and a surge in global bond yields, Oanda senior market analyst Edward Moya said in a note. "Central banks globally are about to take policy into even more restrictive levels and that is countering China's reopening momentum," he added. Market focus will also remain on the coming release of minutes from the Fed's latest meeting, ANZ analysts said in a note, adding that further rate increases could damp oil demand. Front-month WTI and Brent fell 0.4% to $76.05/bbl and $82.75/bbl, respectively.
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(END) Dow Jones Newswires
02-21-23 2215ET
