Indian Morning Briefing: Asian Markets Mixed

GLOBAL MARKETS 
DJIA          32529.63    332.04     1.03% 
Nasdaq        12162.59    130.17     1.08% 
S&P 500        4072.43     48.82     1.21% 
FTSE 100       7345.25     -2.98    -0.04% 
Nikkei Stock  27938.65    123.17     0.44% 
Hang Seng     20419.89   -202.79    -0.98% 
Kospi          2456.65     21.38     0.88% 
SGX Nifty*    17157.00    210.0      1.24% 
*Aug contract 
 
USD/JPY  134.37-38    +0.09% 
Range    134.67   134.24 
EUR/USD  1.0193-96    -0.03% 
Range    1.0206   1.0190 
 
CBOT Wheat Sept   $8.170 per bushel 
Spot Gold  $1,753.33/oz   -0.1% 
Nymex Crude (NY) $97.01     -$0.25 
 
 
US STOCKS 

Stocks kept climbing, despite data showing the U.S. economy marked a second straight quarterly decline, a common definition of recession.

The S&P 500 added 1.2%, near its highs on the day. The Dow Jones Industrial Average added 1%, while the technology-heavy Nasdaq Composite Index gained 1.1%. The S&P 500 and Dow had climbed in five of the previous seven sessions.

The U.S. economy shrank at a 0.9% annual rate last quarter, marking a second straight quarterly decline in gross domestic product, the Commerce Department said.

While the data showed the economy is in a worse state than expected, investors would likely not rush to make any new bets on whether it will alter the Fed’s plan for interest rates, said Hani Redha, a portfolio manager at PineBridge Investments.

“There can often be this ‘bad news is good news’ idea,” he said. “But for the Fed, fighting inflation is still the priority.”

 
 
ASIAN STOCKS 

Japan’s Nikkei Stock Average rose 0.5% to 27965.44, led by gains in tech stocks, as concerns eased somewhat about higher costs of borrowing despite uncertainty over the economic outlook. Financial stocks were underperforming following sharp falls in U.S. Treasury yields overnight. Earnings are in focus. Daiichi Sankyo and Sony Group are scheduled to announce results later in the day.

South Korea’s Kospi advanced 0.8% to 2455.38 in early trade, led by gains in electronics and internet stocks. The benchmark is set to notch a second straight weekly advance. Investor sentiment is supported by Wall Street’s rally overnight, amid growing hopes that the Federal Reserve’s policy tightening should not be as aggressive as expected after a second straight quarterly decline in U.S. gross domestic product.

Hong Kong’s Hang Seng Index dropped 0.1% to 20596.28. Sentiment could remain weak as investors expect China’s economic growth outlook to remain dim in 2H, KGI Research analysts said in a note. Investor worries likely worsened after the Chinese government omitted any promises that the country would hit its 2022 growth target during a high-level meeting Thursday, KGI Research added.

Chinese shares weakened in early trade, as losses by liquor makers and retailers offset gains in renewables. China’s Politburo said yesterday it will keep the economy running within “a reasonable range,” all but acknowledging that the country would miss its annual growth target this year. The Shanghai Composite Index slipped 0.1% to 3280.24, the Shenzhen Composite Index gave up 0.2% and the ChiNext Price Index was 0.5% lower.

FOREX 

Asia currencies were mixed against USD, but may strengthen on risk-on sentiment driven by overnight gains on Wall Street and this morning’s advance in U.S. stock futures. Investors continued to trim hawkish Fed bets, while stronger-than-expected earnings reports from a few U.S. tech giants boosted risk sentiment, said MUFG Bank currency analyst Sophia Ng in a research report. Asia ex-Japan currencies could extend gains after most of them rose Thursday, she said. USD/KRW rose 0.2% to 1,298.45 while USD/SGD was little changed at 1.3793 and AUD/USD was up 0.1% at 0.6999.

METALS 

Gold prices inched lower after logging its biggest one-day percentage gain since March overnight. The precious metal may face continued pressure from rising bond yields as the U.S. Fed keeps a hawkish stance, Fitch Solutions said in a note. “Going forward, we expect US dollar strength and recovering bond yields to cap gold prices. However, prices won’t collapse back to pre-Covid-19 levels, as gold will remain supported by the evolving Russia-Ukraine war, rising global inflation, and the still persisting Covid-19 pandemic,” Fitch said. Spot gold was 0.1% lower at $1753.33/oz.

OIL SUMMARY 

Oil prices rose in early Asia trade after settling overnight on a mixed note. “It still seems like traders need little justification to pare bullish bets against a generally gloomy economic backdrop and the threat of a protracted economic slowdown,” SPI Asset Management Managing Partner Stephen Innes said in a commentary. Fitch Ratings expects Brent crude to average $105/bbl for this year, though it notes “a considerable array of risks to the outlook, now tilting to the downside.” Front-month WTI crude-oil futures rose 1.3% to $97.66/bbl and Brent was 0.9% higher at $108.11/bbl.

 
 
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JPMorgan Must Face Former Compliance Employee's Lawsuit, Judge Rules 
 
 

(END) Dow Jones Newswires

July 28, 2022 23:17 ET (03:17 GMT)

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