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.
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(END) Dow Jones Newswires
01-05-22 2215ET
