Indian Morning Briefing: Asian Markets Lower at Start of the Week

GLOBAL MARKETS DJIA34721.12137.55 0.40% Nasdaq 13711.00-186.30-1.34% S&P 500 4488.28-11.93-0.27% FTSE 1007669.56117.75 1.56% Nikkei Stock 26833.65-152.15-0.56% Hang Seng 21349.31-522.70-2.39% Kospi2692.95 -7.44-0.28% SGX Nifty*17807.00-89.5 -0.50% *April contractUSD/JPY 124.90-91+0.49% Range125.00124.08 EUR/USD 1.0877-80+0.03% Range1.09181.0879CBOT Wheat May $10.514 per bushel Spot Gold$1,945.11/ozUnch Nymex Crude (NY) $97.98$1.95U.S. STOCKS

Uncertainty about Federal Reserve policy and the war in Ukraine pushed the S&P 500 to a weekly loss and stoked a selloff in the government bond market.

The broad stock-market gauge lost 11.93 points, or 0.3%, to 4488.28 Friday. The tech-heavy Nasdaq Composite declined 186.30 points, or 1.3%, to 13711.00. The blue-chip Dow Jones Industrial Average reversed early losses to close up 137.55 points, or 0.4%, to 34721.12.

All three major indexes ended the week with losses. The S&P 500 snapped a three-week winning streak that had sent it toward its best performance since November 2020, losing 1.3%. The Dow and Nasdaq lost 0.3% and 3.9%, respectively.

ASIAN STOCKS

Japanese stocks were lower, dragged by falls in electronics stocks, as the war in Ukraine and its impact on global trade has raised uncertainty over corporate earnings. Sony Group fell 3.5% and sensor company Keyence was 2.6% lower. Investors were focusing on commodity prices and corporate results for the quarter ended February. The Nikkei Stock Average was 0.7% lower at 26801.16.

South Korea's Kospi fell 0.3% to 2692.87 in early trade as internet and energy stocks retreated. Risk appetite was receding on the Fed's hawkish policy stance and lingering geopolitical risks, NH Futures economist S.H. Kim said. Foreign and institutional investors were net sellers. USD/KRW was 0.4% higher at 1,230.00 on risk aversion. Index heavyweight Samsung Electronics was 0.4% lower. Meanwhile, home-appliance giant LG Electronics rose 3.3%, extending gains after an upbeat 1Q earnings forecast.

Hong Kong's Hang Seng Index extended its early decline and was recently 2.5% lower at 21333.68. The HSI was weighed by weaker risk appetite due to the Federal Reserve's increasingly hawkish stance, UOB analysts said in a note. UOB added that the worsening Covid-19 outbreak in China and geopolitical risks could also continue to weigh on sentiment. Decliners include delivery platform Meituan, which fell 4.1%, and lens manufacturer Sunny Optical, down 3.0%. Other decliners included oil major Cnooc, which slid 2.2% after the company said it planned to raise at least $4.4 billion in a Shanghai listing after its shares were delisted from the NYSE. Among gainers, Xinyi Solar added 0.9%.

Chinese stocks were lower in morning trade and extending their declines, amid mixed trading among other Asian equities. The Shanghai Composite Index was recently 1.8% lower at 3193.58, the Shenzhen Composite Index dropped 2.5% to 2028.21 and the ChiNext Price Index slid 3.5% to 2479.22. Investors would be keeping a close eye on China's Covid-19 lockdowns, as authorities have promised to step up monetary support amid the recent outbreak, said Yeap Jun Rong, IG's market strategist. "That may further reinforce expectations of a reduction of its one-year policy loan rate next week," the analyst said. Energy stocks were lower, with PetroChina down 0.4% and China Coal Energy off 1.1%.

FOREX

Most Asian currencies weakened against USD on lingering worries over aggressive Fed tightening. USD likely faces further upside risks this week, as investors continue to brace for a sharper reduction in the Fed's balance sheet, MUFG Bank analysts Sophia Ng and Karman Li said in a note. Most Asia ex-Japan currencies except PHP and IDR weakened against USD last week, mainly because of USD strength driven by hawkish Fed rhetoric, the analysts said. USD/SGD was up 0.2% at 1.3656 while AUD/USD fell 0.2% to 0.7447. USD/PHP climbed 0.6% to 51.86; USD/THB rose 0.4% to 33.62; USD/TWD was up 0.4% at 29.03.

METALS

Gold prices were steady in the early Asian session, with the precious metal likely to remain in a tight trading range, analysts said. Gold has been moving in a tight range lately, but could face pressure as USD strengthens amid surging bond yields, CMC Markets analyst Tina Teng said in a research note. The ICE USD Index was flat at 99.80, while U.S. 10-year Treasury yield was 1bp higher at 2.7212%, according to FactSet. Spot gold was little changed at $1,945.11/oz.

OIL SUMMARY

Oil fell in early Asian trade due to the possibility that China's Covid-19 lockdowns would crimp demand. Crude oil prices could weaken by another 3.0%-5.0% if there seems no end in sight for China's pandemic lockdowns, said Oanda senior market analyst Edward Moya. WTI crude oil should find decent support at the mid-$90s/bbl level, but continued USD strength could keep commodities vulnerable to further falls, Oanda said. Front-Month WTI oil futures were recently 2.4% lower at $95.92/bbl. Front-month Brent crude oil futures were 2.5% lower at $100.21/bbl.

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(END) Dow Jones Newswires

April 10, 2022 23:15 ET (03:15 GMT)