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Indian Morning Briefing : Asian Markets Slightly Higher at Start of Week

DJIA           35677.02     73.94     0.21% 
Nasdaq         15090.20   -125.50    -0.82% 
S&P 500         4544.90     -4.88    -0.11% 
FTSE 100        7204.55     14.25     0.20% 
Nikkei Stock   28543.20   -261.65    -0.91% 
Hang Seng      26092.98    -33.95    -0.13% 
Kospi           3010.35      4.19     0.14% 
SGX Nifty*     18155.50     11.0      0.06% 
*Oct contract 
USD/JPY    113.76-77    +0.24% 
Range      113.83   113.47 
EUR/USD    1.1645-48    0.00% 
Range      1.1650   1.1636 
CBOT Wheat Dec   $7.560 per bushel 
Spot Gold   $1794.77/oz   0.1% 
Nymex Crude (NY)  $83.99      $1.49 

U.S. stocks were mixed but finished higher for a third consecutive week.

The blue-chip Dow Jones Industrial Average edged up about 0.2% to a new record high. The S&P 500 index shed around 0.1%, and the technology-heavy Nasdaq Composite fell 0.8%.

Stocks have risen in recent days after strong earnings results from some of the biggest U.S. corporations. Most S&P 500 companies that have reported earnings have beat analysts’ expectations, and corporate profits are expected to jump around 35% in the latest quarter from the prior year, according to Refinitiv data.

The latest financial results from companies like Tesla and Procter & Gamble showed that companies have been able to insulate themselves from the global supply-chain crisis and deliver strong results. Some companies have been passing down higher prices to customers.


Japanese stocks fell, weighed by declines in auto and electronics stocks amid continuing concerns about the pace of economic recovery from the pandemic. Political developments are being closely watched after the ruling Liberal Democratic Party lost an election on Sunday to fill a vacancy for an upper-house seat in the central Japanese prefecture of Shizuoka. The lower-house election is scheduled for Oct. 31. The Nikkei Stock Average was recently down 1.0% at 28521.79.

South Korea’s Kospi fell 0.6% to 2988.80 in early trade, dragged by tech, chemical and energy stocks. Inflation concerns are still weighing on sentiment, with corporate earnings increasingly in focus, Kiwoom Securities said. Foreign and institutional investors remained net sellers.

Hong Kong stocks were lower in morning trade, with the benchmark Hang Seng Index down 0.4% at 26022.83. KGI Securities said the market is likely to remain range-bound this session, citing Nasdaq losses in the U.S. last Friday, which could drag on the tech sector in Hong Kong. The brokerage puts the HSI’s immediate support level at 25840. Property developers were among the top losers, as the sector weakened from a rebound last week.

Chinese stocks were mixed in early trade, following a temporary reprieve on China Evergrande’s debt crisis last week. The Shanghai Composite Index fell 0.2% to 3574.77, the Shenzhen Composite Index was flat at 2413.20, while the ChiNext Price Index–a measure for emerging industries and startups–was 1.0% higher at 3318.40. Investors’ focus will likely be on a resurgence of Covid-19 infections in China, and aggressive measures by the government to control the spread of the virus may weigh on risk appetite for now, IG said.


USD risks remain skewed to the upside for now, Commonwealth Bank of Australia said. U.S. inflation is building and is now unlikely to return to the FOMC’s target band. Market-based and consumer inflation expectations are consistent with rising long-term U.S. inflation. Importantly, FOMC members are slowly conceding that inflation risks are increasing, CBA added. The upshot is that interest-rate markets can continue to price a more aggressive Fed Funds rate hike cycle, which can support the USD. High inflation isn’t contained to the U.S. As a result, CBA still sees a risk that short-term interest rates start to price in a global monetary tightening cycle that is so strong it causes equities to correct lower.

NZD/USD will remain supported by the outlook for a rapid tightening cycle by the RBNZ, Commonwealth Bank of Australia said. Interest-rate markets now expect the official cash rate will lift by around 150 basis points to just over 2% by the end of 2022. Nevertheless, the boost to NZD from RBNZ pricing can fade as markets increasingly price rate hike cycles in other countries, including the U.S., CBA said. October business and consumer confidence are the economic highlights this week. However, with neither survey likely to change the outlook for the RBNZ, expect minimal implications for NZD. NZD/USD was at 0.7149 early on Monday.


Gold rose in early Asian trade, after a weaker greenback offered some support Friday. The precious metal is likely to be supported by some safe-haven demand amid ongoing Covid-19-related concerns in Europe and Asia, Oanda said. It puts support at $1,769.50 and resistance at $1,800.00. Spot gold was recently 0.1% higher at $1794.77/oz.


Oil rose in early Asia trade amid a strong demand backdrop and tight supply. UOB said crude stockpiles at Cushing Oklahoma are quickly approaching critically low levels and expects the decline to accelerate. “The last time that happened, crude cost more than US$100/bbl,” it said. U.S. President Joe Biden has said Americans should expect high gasoline prices into next year due to supply being withheld by OPEC and other foreign oil producers, ANZ said. Front-month WTI crude oil was 0.5% higher at $84.17/bbl and Brent crude was 0.3% higher at $85.75/bbl.

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