GLOBAL MARKETS DJIA 29590.41 -486.27 -1.62% Nasdaq 10867.93 -198.88 -1.80% S&P 500 3693.23 -64.76 -1.72% FTSE 100 7018.60 -140.92 -1.97% Nikkei Stock 26593.93 -559.90 -2.06% Hang Seng 17965.73 32.46 0.18% Kospi 2236.40 -53.60 -2.34% SGX Nifty* 17188.50 -143.5 -0.83% *Sept contract USD/JPY 143.92-93 +0.41% Range 144.08 143.26 EUR/USD 0.9658-61 -0.31% Range 0.9711 0.9556 CBOT Wheat Dec $8.804 per bushel Spot Gold $1,642.97/oz Unch. Nymex Crude (NY) $79.02 -$4.47 US STOCKS
A wave of selling in financial markets swept across the globe, with nervous investors forced to again confront the specter of recession.
Investors, mulling stubbornly high inflation and unnerved by Russia's attempts to escalate the war in Ukraine, have fled for the exits this week, driving a concurrent selloff in stocks and bonds. Bond yields remained near their highest levels in more than a decade as prices tumbled.
The Dow Jones Industrial Average lost 1.6%. The S&P 500 dropped 1.7%. The Nasdaq Composite declined 1.8%.
The three indexes tumbled for a second consecutive week in a selloff that has dragged down the S&P 500 by 9.2% and the Dow by almost 8%. That marked their worst two-week declines since June. The Nasdaq has fallen more than 10% over the past two weeks, its biggest such decline since March 2020, during the pandemic-induced market crash.
ASIAN STOCKS
Japanese stocks were weaker, dragged by falls in auto and electronics stocks, as concerns continued about policy tightening by major central banks and the global economic outlook. Japanese officials' comments on the yen are being closely watched following the government announcement of yen-buying intervention on Thursday. USD/JPY was at 143.56, compared with 143.34 late Friday in New York. The Nikkei Stock Average was down 2.0% at 26614.93.
South Korea's benchmark Kospi was 1.9% lower at 2247.33 in morning trade, dropping in line with other regional markets as sentiment remains negative after U.S. stocks fell Friday amid fears of a recession. Developments relating to North Korea will also be closely watched, after the country fired a short-range ballistic missile into the East Sea on Sunday.
Hong Kong stocks were slightly higher in morning trade, picking up from opening losses and showing signs of recovery from last week's broad downturn. The benchmark Hang Seng Index edged up 0.1% to 17950.59. Macau casino operators led gains, after the city said it plans to resume accepting group tours from mainland China soon. But Ping An Securities analysts warned that risk-averse sentiment is likely to persist in the near term, given the global high interest-rate environment. While the market's valuations are cheap, a clear path to recovery remains uncertain, they said.
Chinese shares diverged in early trade as regional equities had a weak start to the week. Chinese shares fell last week amid concerns that Beijing's prolonged zero-Covid policy may drag on the country's corporate earnings and economic growth. Losses this morning were led by oil companies and miners. The Shanghai Composite Index fell 0.1% to 3084.90, the Shenzhen Composite Index weakened 0.1% and the ChiNext Price Index was 0.6% higher.
FOREX
Most Asian currencies weakened sharply against the USD amid rising fears of a global recession. If a sense of crisis about the world economy were to emerge, the USD could climb substantially, said CBA strategists in a research report. The U.K.'s poor situation exacerbated support for USD, while the pickup in financial-market volatility aided USD and CHF due to their safe-haven status, the strategists added. USD/KRW rose 0.4% to 1,428.80 after earlier touching 1,433.56, its highest intraday level since March 2009, and USD/THB gained 0.7% to 37.77 after reaching 37.82, its highest intraday level since August 2006, according to FactSet.
METALS
Gold prices were little changed in Asian trade, after settling Friday at their lowest price since April 2020 on a stronger USD. Developments relating to interest rates moves by the Fed will be closely watched, with FOMC members believing that interest rates will continue to climb further next year, Commerzbank analysts said in a note. "For as long as the Fed remains on this interest rate path, the gold price is likely to have a hard time making any lasting gains," they added. Spot gold was little changed at $1,642.97/oz.
OIL SUMMARY
Oil prices were higher in early Asian trade, recovering from Friday's losses, which were driven by a stronger USD and fears of a recession. But the outlook for oil remains broadly negative. "It seems central banks are poised to remain aggressive with rate hikes and that will weaken both economic activity and the short-term crude demand outlook," Oanda's senior market analyst Edward Moya said in a note. He also thinks the USD rally will continue and weigh on oil prices in the near term. Front-month WTI futures rose 1.4% to $79.85/bbl and Brent gained 1.3% to $87.27/bbl.
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(END) Dow Jones Newswires
09-25-22 2315ET
