GLOBAL MARKETS DJIA 34580.08 -59.71 -0.17% Nasdaq 15085.47 -295.85 -1.92% S&P 500 4538.43 -38.67 -0.84% FTSE 100 7122.32 -6.89 -0.10% Nikkei Stock 27828.50 -201.07 -0.72% Hang Seng 23523.43 -243.26 -1.02% Kospi 2965.70 -2.63 -0.09% SGX Nifty* 17265.00 30 0.17% *Dec contract USD/JPY 112.98-99 +0.15% Range 113.08 112.75 EUR/USD 1.1291-94 -0.19% Range 1.1320 1.1289 CBOT Wheat Dec $7.944 per bushel Spot Gold $1,783.44/oz Unch Nymex Crude (NY) $66.18 -$0.32 U.S. STOCKS
Markets ended a tumultuous week on an ominous note on Friday, with a broad technology-sector selloff sending major U.S. stock indexes sharply lower and Treasury yields falling at a pace not seen since some of the worst days of the pandemic last year.
The Nasdaq ended the week with a 2.6% weekly loss, lagging behind its peers, and concluded its biggest two-week percentage decline since March. The S&P 500 fell 1.2%. The Dow Jones Industrial Average fell 0.9%, notching a fourth consecutive week of losses.
ASIAN STOCKS
Japanese stocks were lower, weighed by falls in tech and e-commerce stocks, as prospects of Fed's potential tightening raise concerns about global growth. SoftBank Group was recently down 7.3% following selloffs in some of its portfolio companies such as Didi Global and Alibaba Group Holding. Investors were focusing on any developments over the Omicron variant of Covid-19 and governments' responses. The Nikkei Stock Average was 0.8% lower at 27802.29.
South Korea's benchmark Kospi fell 1.2% to 2933.39 in early trade, dragged by consumer and tech stocks. Sentiment turned sour as the recently eased social-distancing rules have been tightened again in response to a surge in Covid-19 cases and the arrival of the Omicron variant in the country. Coronavirus-sensitive stocks were lower. Large-cap semiconductor and internet shares also retreated, tracking the decline in U.S. tech stocks on Friday.
Hong Kong stocks were lower in morning trade, as the market continued to weaken from a broad downturn last week. The benchmark Hang Seng Index shed 0.7% to 23599.79. Chinese tech giants led losses, extending the sector's decline on Friday after new rules from U.S. regulators that would allow delisting of foreign stocks for failure to meet certain audit requirements. Alibaba dived 6.9% and JD.com slid 3.7%. KGI Securities reckoned the sector would remain under pressure throughout the day's trading.
Chinese stocks were broadly lower in early trade, tracking weakness among other Asian markets as investors focused on elevated China-U.S. political tensions and the spread of the Omicron variant. The Shanghai Composite Index was 0.1% higher at 3611.95 and the Shenzhen Composite Index fell 0.2% to 2521.47. The ChiNext Price Index declined 0.6% to 3459.57. Auto stocks were lower amid demand concerns following the emergence of the Covid-19 Omicron variant. Chinese tech shares would be in focus, following Didi's sharp drop last Friday following its plans to delist from the New York Stock Exchange, IG said.
FOREX
USD/JPY has fallen as concerns about the Omicron variant have pushed down crude-oil prices and U.S. Treasury yields, and the pair may continue to decline to 112.00 this week, Citi said. Yet, aggressive betting against the USD/JPY might not be prudent because concerns about inflation may prompt the Fed and other central banks outside Japan to tighten policy and because prolonged disruption of supply chain was likely to delay the recovery of Japan's trade balance due to sluggish exports, Citi said. Both of these conditions may support the USD/JPY. The pair was recently at 113.00, compared with 112.80 late Friday in New York.
AUD/USD remained the target of risk-averse global currency investors, breaking below 0.7000 on Friday and easily the worst performing G-10 currency. Market strategists said further weakness was likely. The pair's price action suggested that it remains the preferred currency proxy for gloomier Omicron scenarios such as existing vaccines offering only low protection until targeted boosters are available, said Sean Callow, currency strategist at Westpac. AUD/USD has broken plenty of support levels and risks falling towards 0.6900, he said. Still, short positioning on the currency is high, so good news could result in substantial short covering, he said.
METALS
Gold was little changed in early Asian trade, after rising on Friday following weaker-than-expected U.S. jobs growth. Demand for safe-haven assets such as gold were likely to be supported in the near term amid concerns over the impact of the new Covid-19 Omicron variant on the global economy. "The new variant of the virus, which has meanwhile been detected in the U.S. too, is currently hanging over everything like the sword of Damocles," Commerzbank noted. Spot gold was flat at $1,783.44/oz.
OIL SUMMARY
Oil rose in early trade, after falling sharply last week on concerns over weaker demand from new mobility restrictions due to the Covid-19 Omicron variant. "In a glass half-full version, if the virus is deemed to be less virulent than the Delta variant with current vaccinations remaining effective, the ongoing economic recovery could contribute to price pressures becoming more broad-based," Mizuho Bank said. Front-month WTI crude was 2.4% higher at $67.87/bbl, while Brent gained 2.3% to $71.47/bbl.
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(END) Dow Jones Newswires
12-05-21 2215ET
