Indian morning briefing: Asian markets mixed; The overall consumer price index in Japan increased by 3.7% in October

GLOBAL MARKETS 
DJIA             33546.32     -7.51    -0.02% 
Nasdaq           11144.96    -38.70    -0.35% 
S&P 500           3946.56    -12.23    -0.31% 
FTSE 100          7346.54     -4.65    -0.06% 
Nikkei Stock     27980.14     49.57     0.18% 
Hang Seng        18373.90    328.24     1.82% 
Kospi             2458.94     16.04     0.66% 
SGX Nifty*       18420.00      45.0     0.24% 
*Nov contract 
 
USD/JPY     139.87-88  -0.23% 
Range       140.49   139.85 
EUR/USD     1.0367-70  +0.03% 
Range       1.0380   1.0358 
 
CBOT Wheat Dec $8.066 per bushel 
Spot Gold  $1,763.20/oz 0.2% 
Nymex Crude (NY) $81.86  -$3.73 
 
 
US STOCKS 

Stocks fell, as investor enthusiasm about a possible slowdown in interest rate increases by the Federal Reserve faded.

The S&P 500 fell 0.3%, paring sharp losses incurred earlier in the day. The technology-focused Nasdaq Composite fell 0.3%, and the Dow Jones Industrial Average fell less than 0.1%. All three indicators remain elevated for the month of November.

St. Louis Fed President James Bullard said interest rates should go higher to constrain the economy to an extent that brings inflation back to the Fed’s target.

“Much of the market recovery over the past week has been on expectations that the Fed will pivot imminently,” said Edward Park, chief investment officer at Brooks MacDonald. The Fed has made it clear that it will not.

 
 
ASIAN STOCKS 

Japanese stocks rose in early trade, even after data showed that overall consumer inflation rose 3.7% from a year earlier in October. The CPI reading exceeded the Bank of Japan’s 2% target for the seventh consecutive month. The Nikkei was up 0.2%, at 27,999.28.

South Korea’s Kospi Index rose 0.8% to 2461.50 in what appeared to be a technical rebound after the benchmark posted its biggest one-day drop since mid-October on Thursday. However, the gains may be limited after Fed officials overnight reiterated their hawkish stance on rate hikes, analysts say.

Hong Kong stocks rose in morning trade, with the benchmark Hang Seng Index rising 1.3% to 18,275.02. Chinese tech giants led the rally after the sector rallied on Wall Street overnight, as investors cheered Alibaba’s latest earnings. After the recent rise in the HSI, Central China International analysts warned of potential downside risks for the market, citing persistent external risk factors, including a slowing global economy and rising interest rates. They say defensive and high-yielding stocks may still be a good bet despite the less impressive jump in these sectors in recent sessions.

Chinese stocks rose, tracking broad gains among other Asian stocks. The Shanghai Composite Index rose 0.1% to 3117.79, the Shenzhen Composite Index rose 0.2% to 2043.62 and the ChiNext Price Index rose 0.7% to 2401.48. Chinese liquor stocks were higher, with Kuishu Moutai up 0.3% and Wuliang Yibin up 0.7%. Daily Covid-19 cases in China have risen to the highest level since March, CBA analyst Vivek Dhar said in a note, raising concerns that Chinese authorities may introduce tougher restrictions to curb the virus: “The next few weeks will help expose the biases of policymakers with policymakers.” China’s Covid-zero policy”.

FOREX 

Most Asian currencies strengthened against the US dollar in the Asian morning session on risk appetite driven by gains in regional equity markets. However, the currency’s strength may be affected by hawkish comments from Federal Reserve officials, analysts said. St. Louis Fed President Bullard said overnight that the federal funds rate is “not yet in an area that would be considered sufficiently restrictive” and should rise to at least 5%-5.25% to get inflation under control, Carol Kong, economist and currency strategist in CBA, he said in a research report. USD/KRW was down 0.4% at 1338.71, USD/THB was down 0.1% at 35.80 and AUD/USD was up 0.2% at 0.6698.

METALS 

Gold prices rose in early Asian trade, after falling overnight on the back of a stronger US dollar and Treasury yields after hawkish comments from St. Louis Fed President James Bullard. “A deeper bounce for gold cannot be ruled out as it remains at the mercy of the US dollar and broader sentiment,” DailyFX analyst Zen Foda said in a note, adding that the precious metal remains weak below the key $1,800 level. Spot gold rose 0.2% to $1,763.20 an ounce.

OIL SUMMARY 

Oil prices rose in early Asian trade, recovering from overnight losses. However, concerns about China’s anti-coronavirus policy are likely to continue to dampen the energy demand outlook. “China’s Covid fears are on everyone’s mind, and with domestic increases leading to prolonged lockdowns, oil prices are moving slightly towards this increased possibility,” Stephen Innes, managing partner of SPI Asset Management, said in a note. ANZ analysts said in a note that there are also signs that oil markets are declining. They said winter demand for barrel delivery is declining despite the approaching deadline for European sanctions on Russian crude. West Texas Intermediate crude futures for the first month were up 0.6%, at $16/82 a barrel. Next month, Brent crude rose 0.4 percent to $90.11 a barrel.

 
 
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(end) Dow Jones Newswires

November 17, 2022 22:15 ET (03:15 GMT)

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