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Indian Morning Briefing: Asian Markets Mostly Lower, Tracking Wall Street Fall After Fed Minutes

01/05/2022 | 10:16pm EDT
GLOBAL MARKETS 
DJIA             36407.11   -392.54    -1.07% 
Nasdaq           15100.17   -522.54    -3.34% 
S&P 500           4700.58    -92.96    -1.94% 
FTSE 100          7516.87     11.72     0.16% 
Nikkei Stock     28833.98   -498.18    -1.70% 
Hang Seng        22848.15    -59.10    -0.26% 
Kospi             2946.12     -7.85    -0.27% 
SGX Nifty*       17834.00    -139.5    -0.78% 
*Jan contract 
 
USD/JPY    115.88-89  -0.19% 
Range      116.20   115.83 
EUR/USD    1.1312-15   0.00% 
Range      1.1320   1.1305 
 
CBOT Wheat March $7,606 per bushel 
Spot Gold $1,808.94/oz -0.01% 
Nymex Crude (NY) $77.08 $0.09 
 
 
US STOCKS 

U.S. stocks traded lower as investors digested minutes from the Federal Reserve's recent policy meeting for clues about plans to wean markets off pandemic-era stimulus measures.

The S&P 500 dropped 1.2% a day after the broad index pulled back from a record high as technology shares fell. The tech-heavy Nasdaq Composite Index fell 2.5%, while the blue-chip Dow Jones Industrial Average - which set its own record Tuesday - lost 0.6%.

"We expect growth to deflate as we go through the year. That will happen naturally. As the monetary, fiscal support fades, markets will have to stand on their own two feet," said Hani Redha, a portfolio manager at PineBridge Investments. "It's not a disaster but it is a headwind at the same time that central banks are on the move."

 
 
ASIAN STOCKS 

Japanese stocks were lower early on, dragged by falls in electronics stocks, as prospects increase for the U.S. central bank to raise interest rates sooner. Investors were focusing on Covid-19 infection trends and the government's response as local media reported that the government is considering measures to limit restaurants' operating hours in the Okinawa, Hiroshima and Yamaguchi prefectures. The Nikkei Stock Average was down 1.7% at 28824.07.

South Korea's Kospi was 0.6% lower at 2936.03 in early trade, dragged by tech and chemical stocks. Wall Street's fall overnight and the Fed's release of minutes from its recent policy meeting--which highlighted inflation concerns--were weighing on investor sentiment. Growing risk-off sentiment sent USD/KRW to a near three-month intraday high, sapping investors' appetite for local equities. The pair was at 1,201.40, versus 1,196.90 late Wednesday.

Hong Kong's Hang Seng Index slipped 0.6% to 22762.21 after swinging moderately between gains and losses in early trade. Traditional economy stocks were likely to be supported by Chinese Premier Li Keqiang on Wednesday stressing the need to strengthen cross-cyclical adjustments and intensify implementation of tax and fee cuts, KGI Research said, referring to media reports.

Chinese stocks fell in morning trade, as the market continued to track down in the new year. The decline also followed broad losses in regional Asian equities, after the Fed's latest meeting minutes indicated it may raise interest rates faster than expected. The benchmark Shanghai Composite Index shed 0.2% to 3587.78, while the Shenzhen Composite Index was also down 0.2% at 2478.07. The ChiNext Price Index, a measure for emerging industries and startups, dropped 0.7% to 3138.44. Central China Securities thinks the market is likely to oscillate around current levels in the near term, as investors are expected to stay on the sidelines and monitor for more signals.

 
FOREX 

JPY strengthened against G-10 and Asian currencies amid risk-off sentiment caused by losses on Wall Street and in most regional equity markets. Market participants have been caught by surprise by a much more hawkish tone from the FOMC minutes than what many had expected, IG said. A shrinking balance sheet and aggressive rate increases indicated by the minutes may have driven concerns over some capping of economic momentum ahead, IG added. USD/JPY fell 0.2% to 115.88, AUD/JPY dropped 0.5% to 83.46 and SGD/JPY was down 0.2% at 85.38.

 
METALS 

Gold was trading steadily in the Asian morning session, but may resume its recent weakness on concerns over the Fed's upcoming interest-rate upcycle. The more hawkish-than-expected FOMC minutes have further dimmed the appeal of gold, OCBC said, adding that it expected more selling pressure ahead, as the U.S. central bank embarks on its rate normalization path. Spot gold was little changed at $1,808.94/oz.

 
OIL SUMMARY 

Oil fell in the Asian morning session after the Energy Information Administration on Wednesday reported that U.S. crude inventories dropped by a smaller-than-expected 2.1 million barrels for the week ended Dec. 31. However, energy traders are growing optimistic that once the Omicron Covid-19 variant wave passes, a massive pick-up in air travel will keep supporting the outlook for crude demand, Oanda said. Front-month WTI crude oil futures were 1.0% lower at $77.05/bbl; front-month Brent crude oil futures were down 1.2% at $79.84/bbl.

 
 
TOP HEADLINES 
Fed Minutes Point to Possible Rate Increase in March 
Federal Reserve Could Invert Treasury Yield Curve by Third Quarter as It Delivers Rate Hikes, Economists Say 
China Services Activity Improved in December 
Salesforce.com Shares, Software Companies Stumble to Start Year 
Interest-Rate Worries Batter Stock Market 
Private Sector Adds 807,000 Jobs, Double Expectations 
Biden Steps Up Vaccine Push as U.S. Cases Surge 
U.S. Services Activity Slowed Slightly in December 
U.S. Crude Supplies Fall, But Fuel Inventories Rise Sharply 
Anger at Xi'an Lockdown Spreads in China 
Garland Says Jan. 6 Instigators Could Face Prosecution Along With Rioters 
Ghislaine Maxwell Lawyers Request New Trial After Juror Interviews 
Military Bases Housing U.S. Forces Attacked in Syria and Iraq 
How Many Years Could Elizabeth Holmes Face in Prison? Decades, in Theory 
Chicago Public Schools Cancel Classes After Teachers Vote Against In-Person Instruction 
Nike Sues Lululemon for Patent Infringement Over Mirror Fitness Technology 
Hasbro Taps Wizards of the Coast Division Chief Chris Cocks as CEO 
Auto Makers Supercharge Move Into Electric Vehicles 
Warner Boss Doesn't See Omicron Slowing Down Production of Shows 
Airlines Scrap Over 1,000 Flights for 11th Straight Day 
Allegiant Air to Buy 50 Boeing 737 MAX Jets 
 
 

(END) Dow Jones Newswires

01-05-22 2215ET

Stocks mentioned in the article
ChangeLast1st jan.
AUSTRALIAN DOLLAR / US DOLLAR (AUD/USD) -0.13% 0.7032 Delayed Quote.-3.01%
BRITISH POUND / US DOLLAR (GBP/USD) 0.19% 1.24866 Delayed Quote.-7.89%
CANADIAN DOLLAR / US DOLLAR (CAD/USD) -0.17% 0.7783 Delayed Quote.-1.43%
CENTRAL CHINA SECURITIES CO., LTD. 2.38% 1.29 Delayed Quote.-7.86%
DJ INDUSTRIAL 0.03% 31261.9 Real-time Quote.-13.99%
EURO / US DOLLAR (EUR/USD) -0.18% 1.056 Delayed Quote.-6.97%
FTSE 100 1.19% 7389.98 Delayed Quote.0.07%
HANG SENG 2.96% 20717.24 Delayed Quote.-11.46%
HASBRO, INC. -2.37% 84.7 Delayed Quote.-16.78%
INDIAN RUPEE / US DOLLAR (INR/USD) -0.59% 0.012844 Delayed Quote.-3.79%
KOSPI COMPOSITE INDEX 1.94% 2638.73 Real-time Quote.-11.35%
LONDON BRENT OIL 0.94% 112.54 Delayed Quote.42.93%
LULULEMON ATHLETICA INC. 1.04% 274.04 Delayed Quote.-29.99%
NASDAQ COMP. -0.30% 11354.62 Real-time Quote.-27.42%
NEW ZEALAND DOLLAR / US DOLLAR (NZD/USD) 0.38% 0.64048 Delayed Quote.-6.67%
NIKE, INC. 1.47% 108 Delayed Quote.-35.20%
NIKKEI 225 1.27% 26739.03 Real-time Quote.-7.13%
S&P 500 0.01% 3901.36 Real-time Quote.-18.16%
S&P GSCI BRENT CRUDE INDEX 0.15% 936.0862 Real-time Quote.41.19%
S&P GSCI CRUDE OIL INDEX 0.35% 604.4063 Real-time Quote.46.11%
S&P/CITIC 300 INDEX 1.99% 3720.88 Real-time Quote.-18.76%
S&P/CITIC 50 INDEX 2.46% 3566.52 Real-time Quote.-17.04%
THE BOEING COMPANY -5.07% 120.7 Delayed Quote.-36.85%
WHEAT FUTURES (W) - CBR (FLOOR)/C1 12.81% 1177.5 End-of-day quote.52.77%
WTI 1.22% 110.515 Delayed Quote.44.84%
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