GLOBAL MARKETS DJIA 30772.79 -208.54 -0.67% Nasdaq 11247.58 -17.15 -0.15% S&P 500 3801.78 -17.02 -0.45% FTSE 100 7156.37 -53.49 -0.74% Nikkei Stock 26656.98 178.21 0.67% Hang Seng 20808.04 10.09 0.05% Kospi 2325.85 -2.76 -0.12% SGX Nifty* 15936.00 -36.5 -0.23% *July contract USD/JPY 138.07-08 +0.47% Range 138.12 137.31 EUR/USD 1.0021-24 -0.37% Range 1.0065 1.0014 CBOT Wheat July $7.982 per bushel Spot Gold $1,727.71/oz -0.4% Nymex Crude (NY) $95.78 -$0.06 US STOCKS
Stocks dropped after data showed inflation reached a new four-decade high last month, reaffirming expectations that the Federal Reserve will continue aggressively tightening monetary policy.
Major indexes wavered during the session but traded lower in late afternoon.The S&P 500 dropped nearly 0.5%, while the Dow Jones Industrial Average lost 0.7%. The tech-heavy Nasdaq Composite slipped almost 0.2%.
Stock futures turned negative after Wednesday morning's data showed that consumer-price inflation accelerated to 9.1% in June. That marked an increase from the 8.6% recorded in May and was a faster rate of inflation than economists had expected.
But some analysts said investors were anticipating that the inflation report could disappoint.
"Certainly the market was braced a bit for a report that was probably not going to look good," said Yung-Yu Ma, chief investment strategist at BMO Wealth Management.
ASIAN STOCKS
Japan's Nikkei Stock Average was down 0.2% at 26425.97, dragged by electronics and financial stocks, as uncertainty continued about the Fed's pace of tightening and the U.S. economic outlook. Any policy-related developments in Japan were in focus, as well as earnings. Fast Retailing is scheduled to report its results later in the day.
South Korea's benchmark Kospi fell 0.3% to 2322.27 in early trade, led by losses in internet, financial and shipping stocks. Investor sentiment was downbeat following Wall Street's retreat overnight after U.S. inflation hit a fresh four-decade high, renewing worries about both the Fed's aggressive policy and a possible recession. But the decline in local stocks was limited as inflation concerns have been factored in by the markets.
Hong Kong's Hang Seng Index fell 0.2% to 20760.82. Shares could remain under pressure in the near term amid reports that home buyers have refused to pay mortgages for unfinished property projects in several Chinese cities, which could hurt the property and banking sectors, KGI Securities analyst Chua Tit Hong said in a research report.
Chinese stocks were mixed in early trade, as losses among lenders offset gains by some battery makers. Chinese banks have been weighed by fallout from home buyers refusing to pay mortgages at unfinished development projects, Soochow Securities said. The Shanghai Composite Index dropped 0.6% to 3263.86 and the Shenzhen Composite Index edged 0.1% lower, while the ChiNext Price Index added 1.0%.
FOREX
Most Asian currencies weakened against USD in the Asian morning session on concerns over aggressive Fed tightening following higher-than-expected U.S. June CPI data overnight. The data, hawkish Fed rhetoric and the Bank of Canada's 100bp rate increase have fueled market expectations of more aggressive policy tightening by the Fed, said MUFG Bank's currency analyst Sophia Ng in a research report. Asia ex-Japan currencies are poised to depreciate against the greenback on the back of USD strength, the analyst added. USD/KRW rose 0.5% to 1,311.76 and USD/JPY gained 0.4% to 137.93 while AUD/USD edged 0.1% lower to 0.6749.
METALS
Gold fell in Asia trading on the possibility that the Fed will increase the size of its interest-rate increases. The "very hot" U.S. inflation report released Wednesday has weighed on gold prices as risks of much more aggressive Fed tightening have increased, said Oanda's senior market analyst, Edward Moya, in an email. However, non-interest bearing gold may begin to see some safe-haven flows as global recession risks will cap how high rates can go by year-end, he said. Spot gold fell 0.4% to $1,727.71/oz.
OIL SUMMARY
Oil rose in the Asian morning session in a possible technical rebound. After a recent slide, oil prices appear to be in oversold territory, based on their relative strength indicator, which is a measure of market sentiment, Phillip Securities Research said in morning commentary. Front-month WTI crude oil futures were 0.2% higher at $96.48/bbl; front-month Brent crude oil futures were 0.3% higher at $99.88/bbl.
TOP HEADLINES Fed's Mester: Not Ready to Call for 100-Basis-Point Rate Increase Inflation Hits New Four-Decade High of 9.1% Hot Inflation Report Puts Pressure on Federal Reserve Barkin Says Inflation Fight Must Occupy Fed's Full Attention Australia's Unemployment Rate Falls to Lowest Since 1974 U.S. Economy Slows in Several Parts of the Country, Fed's Beige Book Says Bank of Canada Surprises With Full-Point Rate Rise to Combat Inflation Michael Barr Confirmed as Fed's Top Banking Regulator Yellen Pitches Russian-Oil Price Cap to Chinese Counterpart U.S. Oil and Fuel Inventories Surge Higher Singapore Economy Grew 4.8% in Second Quarter Singapore Central Bank Tightens Monetary Policy in Unexpected Move Federal Deficit Narrowed in June as Spending Fell, Receipts Rose Ukraine Strikes Show Impact of New Weapons Dark Horse Shakes Up Race for U.K. Prime Minister Biden Arrives in Israel on High-Stakes Mideast Trip Shanghai Lockdown Concerns Rise Even as Covid Eases Across China United Airlines Pilots to Delay Contract Vote Crypto Crash Drags Lender Celsius Network Into Bankruptcy Tesla Supplier Panasonic Plans $4 Billion EV Battery Factory in Kansas FDA Authorizes Novavax's Covid-19 Vaccine
(END) Dow Jones Newswires
07-13-22 2316ET
