Indian morning briefing: Asian markets are broadly higher
GLOBAL MARKETS DJIA 33044.56 -252.40 -0.76% Nasdaq 10852.27 -104.74 -0.96% S&P 500 3898.85 -30.01 -0.76% FTSE 100 7747.29 -83.41 -1.07% Nikkei Stock 26455.14 49.91 0.19% Hang Seng 21787.88 136.90 0.63% Kospi 2374.26 -6.08 -0.26% SGX Nifty* 18136.00 22.5 0.12% *Jan contract USD/JPY 128.76-77 +0.26% Range 128.89 128.36 EUR/USD 1.0838-41 +0.06% Range 1.0846 1.0829 CBOT Wheat March $7.344 per bushel Spot Gold $1,930.50/oz -0.1% Nymex Crude (NY) $80.46 $0.98 U.S. STOCKS
US stocks extended a losing streak on Thursday as economic data and corporate earnings reports overshadowed investors’ views on the health of the economy.
After opening lower, the S&P 500 was unable to regain much momentum, falling for the third day in a row. It fell 30.01, or 0.8%, to 3,898.85. The Dow Jones Industrial Average fell 252.40, or 0.8%, to 33,044.56, dipping into negative territory over the year. The technology-heavy Nasdaq Composite lost 104.74, or 1%, to 10,852.27.
The losses this week came along with weaker-than-expected economic numbers. Data on retail sales and producer prices pointed to a growing slack in the US economy, a sign that the Fed’s fight against inflation is working well, but not without an economic cost.
Japanese stocks fell slightly in early trading, affected by a drop in electronics stocks, with continued uncertainty about earnings and the economic outlook amid tightening policy by central banks. Investors are focusing on the economic data and its political implications, ahead of the earnings season that is set to begin next week. The Nikkei fell 0.1% to 26,369.97.
South Korea’s benchmark Kospi Index rose 0.3% to 2,387.53 in early trade, led by semiconductors and financial stocks. Foreign investors are net buyers of local stocks, with USDJPY down 0.1% at 1,230.85. Trading is thin ahead of the Lunar New Year holiday. The investor hopes that a rebound in the semiconductor industry slump later this year will send memory chip makers higher. Samsung Electronics rose 1.1% and SK Hynix jumped 2.6%. Shinhan Financial Group rose 1.1 percent, and digital lender Kakaobank rose 1.7 percent. Internet platform giant Naver rose 1.0%. Shipbuilder Hyundai Heavy Industries rose 0.5% after winning a new contract.
Hong Kong share prices rose in early trade, recovering from a slight drop Thursday to resume the market’s recent rally. The benchmark Hang Seng Index rose 0.6%, to 21,788.13. Ping An Securities analysts said that money flows into the Hong Kong market from international investors have risen in recent sessions, indicating an improvement in investor confidence and an increase in the attractiveness of the city’s shares amid widespread weakness in global stocks. The brokerage believed this could support more upside for internet companies, which are poised to benefit greatly from China’s reopening and rebound in investor sentiment.
Chinese stocks rose ahead of the Lunar New Year holiday next week. The Covid-19 outbreak in China may remain in focus as domestic travel is expected to pick up over the upcoming holiday. ANZ analysts said the number of scheduled domestic flights is set to rise by more than 40% in late January. Chinese liquor stocks rose. The Shanghai Composite Index rose 0.3% to 3251.36, the Shenzhen Composite Index rose 0.5% and the ChiNext Price Index rose 0.6%. Markets in China will be closed next week for the Lunar New Year.
Asian currencies are consolidating against the US dollar in the morning session ahead of the upcoming Lunar New Year holiday. China’s reopening is an important macro-tailwind for regional currencies in 2023, but the broader trend for the US dollar should not be ignored, Alvin Tan, head of Asia FX strategy at RBC Capital Markets, says in a research report. For Asian currencies in particular, Tan says the key macro factor for many is expected to remain the broad trend of the US dollar. Tan adds that THB and KRW are among those likely to be boosted by China’s reopening. USD/KRW was up 0.2% at 1235.31, USD/SGD was up 0.1% at 1.3229 while AUD/USD was up 0.2% at 0.6929.
Gold fell slightly in early Asian trade, after prices rose overnight to their highest levels since April amid signs of slowing inflation in the United States. “Gold will look more attractive if the US is seen as likely to experience a recession in the second half of the year, which could mean that earnings will contract much worse than markets say,” Oanda said. Spot gold fell 0.1% to $1930.50 an ounce.
Oil prices rose in early Asian trade, extending overnight gains as traders continued to look ahead to the upcoming European Union ban on Russian oil products. Developments related to OPEC+ are also likely to remain in focus. “OPEC+ maintains its production curbs, and persistent delays to the nuclear deal pose downside risks to Iranian export growth this year,” Fitch Solutions analysts said. Meanwhile, the Commonwealth Bank of Australia said China’s reopening should continue to put the energy market on more solid footing. West Texas Intermediate crude futures for the first month were up 0.6%, at $80.83 a barrel. Next month, Brent crude rose 0.5 percent to $86.62 a barrel.
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(end) Dow Jones Newswires
January 19, 2023 10:15 p.m. ET (03:15 GMT)
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