Monday, March 27

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

DJIA         32944.19   -229.88   -0.69% 
Nasdaq       12843.81   -286.15   -2.18% 
S&P 500       4204.31    -55.21   -1.30% 
FTSE 100      7155.64     56.55    0.80% 
Nikkei Stock 25396.11    233.33    0.93% 
Hang Seng    19966.62   -587.17   -2.86% 
Kospi         2639.90    -21.38   -0.80% 
SGX Nifty*   16582.00    -67.5    -0.41% 
*March contract 
USD/JPY 117.85-86   +0.45% 
Range   117.88   117.31 
EUR/USD 1.0908-11   -0.05% 
Range   1.0944   1.0903 
CBOT Wheat March $10.900 per bushel 
Spot Gold      $1,972.78/oz  -0.8% 
Nymex Crude (NY) $109.18     $3.16 

Stock futures edged higher Sunday evening as investors surveyed the weekend’s developments in Eastern Europe and looked ahead to the next meeting of the Federal Reserve.

Futures for the S&P 500 rose 0.4%, while futures for the tech-heavy Nasdaq-100 index gained 0.4%.

The conflict in Ukraine has unsettled markets as investors try to reconcile a surge in oil prices and the effect of sanctions imposed on Russia by the West. U.S. crude futures fell 1.1% Sunday evening.

Technology stocks extended their declines Friday, dragging broader indexes to weekly losses, as volatility reigned and inflation fears heightened.

The blue-chip Dow Jones Industrial Average ended Friday down 229.88 points, or 0.7%, at 32944.19. The S&P 500 fell 55.21 points, or 1.3%, to 4204.31 while the tech-heavy Nasdaq Composite dropped 286.15 points, or 2.2%, to 12843.81.

All three indexes finished the week in the red after Friday’s selloff. The Dow industrials closed down about 2% for the period, its fifth consecutive weekly loss. The S&P 500 and Nasdaq Composite lost 2.9% and 3.5%, respectively, for the week, capping the fourth weekly loss in the past five weeks for both indexes.


Japan’s Nikkei Stock Average rose 1.7% at 25584.05, led by gains in sectors driven by domestic demand such as real estate and railways. The index fell 3.2% last week on reduced risk appetite caused by Russia’s war on Ukraine. Mitsui Fudosan climbed 5.0% and Central Japan Railway added 4.2%. Investors remained focused on Ukraine headlines. Russian prosecutors have issued warnings to Western companies in Russia, threatening to seize assets of companies that withdraw from the country.

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South Korea’s Kospi fell 0.4% to 2648.77 in early trade, dragged by chemical and battery stocks. Investors were refraining from big bets ahead of the Fed’s two-day policy meeting due to end on Wednesday. The U.S. central bank is expected to raise interest rates for the first time since 2018 to help control inflation. The Russia-Ukraine war and intensifying sanctions against Moscow continue to stoke fears of inflation and sap appetite for local equities. Foreign investors remain net sellers. Battery maker LG Energy Solution fell 6.5%. Posco Chemical was 3.3% lower.

Hong Kong’s Hang Seng Index was 2.2% lower at 20095.22, tracking Wall Street losses Friday and as concerns over potential delisting of U.S.-listed Chinese stocks persisted. Chinese tech giants listed on U.S. exchanges tumbled for a second day on Friday amid delisting fears, which points to another bloodbath day for Hong Kong’s technology stocks, said. Worst performers on the HSI include Haidilao International, which is 15.8% lower and Sands China down 8.6%. Losses on the Hang Seng TECH Index are led by falling 10.1% and Meituan 6.6% lower. The Hang Seng TECH Index was 5.1% lower at 4031.54.

Chinese stocks were lower amid fears over potential delisting of some U.S-listed Chinese companies. The Shanghai Composite Index was 0.9% lower at 3279.79, the Shenzhen Composite Index fell 0.9% to 2154.40 and the ChiNext Price Indexalso declined 0.9% to 2641.46. Chinese stocks listed in the U.S. ADR market tumbled on Friday, and these dual-listed stocks may continue to face selling pressure, KGI Securities said. The U.S. Securities and Exchange Commission has identified five Chinese stocks for potential delisting from U.S. exchanges for failing to adhere to the Holding Foreign Companies Accountable Act. Chinese wine makers were lower with Wuliangye down 2.0%, Kweichow Moutai off 1.9% and Anhui Yingjia Distillery falling 5.5%.


Most Asian currencies weakened against the U.S. dollar in the Asian morning session on worry over the Russian invasion of Ukraine and this week’s FOMC meeting. Risks for Asia ex-Japan currencies remain tilted toward the downside this week in view of the coming rate increase by the Fed and continuing risk aversion amid the Ukraine war, MUFG Bank said. Brent crude oil prices looked to stay above the middle of the Bollinger band, currently at $106.89/bbl, MUFG Bank said, adding that this would continue to be a strain to most Asia ex-Japan countries’ terms of trade. USD/KRW edged 0.1% higher to 1,238.78 and USD/SGD gained 0.3% to 1.3648, while AUD/USD was down 0.3% at 0.7272.

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Buy USD/JPY, TD Securities said, citing economic fundamentals and technical charts. The currency pair was a better expression of U.S.-centric risks, particularly the Fed, the brokerage said, noting markets appeared to be underpriced for 2023 rate increases and was a risk that could be realized in dot-plot at this week’s FOMC meeting. On charts, USD/JPY has nowhere to go but up, particularly now that 116.40 triple top has been breached, it said, which entered a long USD/JPY position targeting 120.00 and a stop-loss order at 115.30. USD/JPY was up 0.2% at 117.58 after earlier touching 117.60, its highest intraday level since January 2017, according to FactSet.


Gold prices declined in the early Asian session as hopes for progress in the Russia-Ukraine talks diminish safe-haven appeal of the precious metal. Russian President Putin noted there were “certain positive shifts” in negotiations with Ukraine, Oanda said. While Putin’s comments were likely giving market participants hope that cease-fire talks were heading in the right direction, economic growth concerns were unlikely to go away anytime soon, hence gold’s pullback should be limited, Oanda added. Spot gold fell 0.8% to $1,972.78/oz.


Oil fell in early Asian trade after surging on Friday. Oil prices, which have been driven higher by Russia’s war on Ukraine, may have been weighed by Russian President Putin’s reported comments that there were “certain positive shifts” in the negotiations between the two countries. Front-month WTI crude oil futures were 2.1% lower at $106.99/bbl. Front-month Brent crude oil futures were 1.7% lower at $110.71/bbl.

Stock Futures Edge Higher as Conflict Has Unsettled Markets 
Russian Prosecutors Warn Western Companies of Arrests, Asset Seizures 
Russian Missiles Strike Ukrainian Military Training Base Near Polish Border 
Russia Asked China for Military Assistance, U.S. Officials Say 
Aquila Acquisition Plans to Raise HK$1B in Hong Kong's First SPAC Listing 
JPMorgan Leads Talks to Contain Nickel Crisis Damage 
Nickel Market Crisis Likely to Delay IGO's Takeover of Western Areas 
Hedge Funds' Commodity Bets Soar After Ukraine Invasion 
Russian Invasion Threatens Wheat Supply 
Chip Makers Stockpiled Materials Ahead of Ukraine's Invasion 
U.S. Won't Negotiate Sanctions With Russia to Save Iran Nuclear Deal to Acquire Deppon Logistics for $1.42 Billion 
Puff Bar, Other E-Cigarette Makers to Get More Scrutiny Under Spending Bill 
Delivery Contractors Blame FedEx for Bad Holiday Season 
Bermuda Pulls Clearance for Russian Jets to Fly 
Russian Oligarch Roman Abramovich Attracts New Scrutiny in Portugal, as Chelsea Sale Stalls 

(END) Dow Jones Newswires

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March 13, 2022 23:15 ET (03:15 GMT)

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