Indian Morning Briefing : Asian Markets Mostly Lower on Expectations of Fed Raising Rates
GLOBAL MARKETS DJIA 36231.66 -4.81 -0.01% Nasdaq 14935.90 -144.96 -0.96% S&P 500 4677.03 -19.02 -0.41% FTSE 100 7485.28 34.91 0.47% Nikkei Stock CLOSED Hang Seng 23667.61 174.23 0.74% Kospi 2924.81 -30.08 -1.02% SGX Nifty* 17935.00 78 0.44% *Jan contract USD/JPY 115.75-76 +0.20% Range 115.77 115.55 EUR/USD 1.1344-47 -0.16% Range 1.1363 1.1345 CBOT Wheat March $7.584 per bushel Spot Gold $1,793.92/oz -0.1% Nymex Crude (NY) $79.09 -$0.37 U.S. STOCKS
U.S. stocks were set to open Monday slightly lower. On Sunday night, Dow Jones Industrial Average futures shed 62 points, or 0.2%, while the S&P 500 futures lost 0.3% and Nasdaq Composite futures fell 0.3%.
The S&P 500 slipped for the fourth consecutive session, losing 19.02 points, or 0.4%, to 4677.03 Friday. The Nasdaq Composite Index shed 144.96 points, or around 1%, to 14935.90. The Dow Jones Industrial Average dropped 4.81 points, or less than 0.1%, to 36231.66.
The S&P 500 ended the week with a loss of 1.9%, while the Dow Jones Industrial Average has lost 0.3%. The tech-heavy Nasdaq Composite fell 4.5%, its worst week since February.
South Korea’s Kospi was 1.0% lower at 2925.07 in early trade, dragged by tech and retail stocks. Slower-than-expected U.S. jobs growth in December was weighing on investor sentiment as concerns lingered about higher inflation and policy tightening. Index heavyweight Samsung Electronics lost 1.2%.
Hong Kong’s Hang Seng Index was up 0.1% at 23523.90 in morning trade, and KGI Securities expected the index to likely trade sideways in the near term amid expectations that the U.S. Federal Reserve will raise rates as soon as March. Morning gains were broad-based, with CSPC Pharmaceutical Group up 2.5%, while lender HSBC Holdings rose 1.4% and sportswear maker Shenzhou International traded 1.2% higher. Decliners include China Life Insurance, which was 2.1% lower after the insurer said that its chairman was under disciplinary review by Chinese officials.
Chinese stocks fell in morning trade, weighed by liquor makers and travel-related sectors, offsetting gains among miners. Overall, the market should trend higher in the medium term amid expectations for looser liquidity conditions, but any near-term rebound from recent weaknesses appears limited, Soochow Securities said. The Shanghai Composite Index was down 0.6% to 3558.74, the Shenzhen Composite Index slipped 0.8% and the ChiNext Price Index was 1.3% lower.
Markets in Japan are closed Monday for a holiday.
The Malaysian ringgit could weaken further against the U.S. dollar this week amid lingering Omicron worries, Kenanga Research said. It expected USD/MYR to trade around the 4.21 level after the pair breached the 4.20 threshold last week as rate rise fears offset stronger crude oil prices. Kenanga said the ringgit may face another round of selloffs if the U.S. inflation data for December, due on Jan. 12, shows another spike, increasing the likelihood that the Fed will start its policy normalization sooner rather than later. USD/MYR was 0.2% lower at 4.2020.
Gold was slightly lower in early Asian trade. Gold prices seemed likely to stay below the $1,800/oz level with the 10-year Treasury yields rising to 1.75% from 1.53%, Oanda said. The Federal Reserve also seemed likely to raise rates in March after the latest jobs report, Oanda added. Spot gold was down 0.1% at $1,793.92/oz.
Oil prices were slightly lower in early Asian trade. While oil futures ended lower on Friday, it tallied a weekly gain of around 5.0%, amid signs of resilient demand as road traffic data held up in key markets, ANZ said. Oil prices also rose after Kazakhstan limited production of the commodity amid domestic unrest and protests, it noted. The WTI front-month contract was 0.3% lower at $78.68/bbl, while Brent crude contract was down 0.2% at $81.58/bbl.
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