Tuesday, January 18, 2022

Indian Morning Briefing: Most of Asian markets fall after Wall Street’s tech-driven fall

DJIA             36113.62   -176.70    -0.49% 
Nasdaq           14806.81   -381.58    -2.51% 
S&P 500           4659.03    -67.32    -1.42% 
FTSE 100          7563.85     12.13     0.16% 
Nikkei Stock     27956.98   -532.15    -1.87% 
Hang Seng        24296.53   -133.24    -0.55% 
Kospi             2924.76    -37.33    -1.26% 
SGX Nifty*       18239.00     -61.5    -0.34% 
*Jan contract 
USD/JPY    113.79-80  -0.33% 
Range      114.23   113.75 
EUR/USD    1.1464-67  +0.10% 
Range      1.1470   1.1452 
CBOT Wheat March $7.466 per bushel 
Spot Gold $1,820.13/oz -0.1% 
Nymex Crude (NY) $81.50 -$1.14 

The S&P 500 and Nasdaq Composite both fell as technology stocks tumbled in the stock market.

The S&P 500 dropped 1.4%, while the tech-heavy Nasdaq Composite dropped 2.5%. The Dow Jones Industrial Average fell 0.5%.

Technology stocks have come under pressure in the new year on rising government bond yields. Higher yields can reduce the appeal of future earnings promised by many tech stocks. The S&P 500’s technical sector fell 2.2% for the session, reducing its year-over-year loss to 5.2%.

The biggest US stocks helped drag the market down, with shares of Apple falling 1.5% and shares of Microsoft down 3.8%. More financially sensitive parts of the stock market outperformed, with the S&P 500’s industrial sector up 0.3%.


Japanese stocks were lower in morning trade, led by losses in electronics and real estate stocks, as the yen strengthened amid economic uncertainty over the Omicron version. Investors were focused on the trends in the Covid-19 transition and the government’s countermeasures. The Nikkei stock average was down 1.9% at 27947.28.

South Korea’s Kospi fell 0.7% to 2940.47 in early trade, tracking Wall Street’s tech-driven decline on lewd comments from Fed officials. Internet, biotech and energy stocks were low. Investors remained largely on edge ahead of the Bank of Korea’s rate decision later in the day.

Hong Kong’s Hang Seng index was 1.1% lower at 24150.35, weighed down by a sell-off in tech stocks. KGI Securities expects profit-taking pressure on Hong Kong stocks after Chinese internet stocks fell sharply in the US ADR market. The Hang Seng Tec Index slipped 3.1% to 5620.11.

Chinese stocks were mixed in early trading, with widespread losses among coal miners, property developers and the energy sector. Soocho Securities said the overall market was on a weak trajectory and Thursday’s decline dampened investor enthusiasm. The Shanghai Composite Index fell 0.8% to 3528.14, the Shenzhen Composite Index slipped 0.1% and the Chinanext Price Index gained 0.2%.


The JPY strengthened against the G10 and Asian currencies, as sharp comments from several Fed officials encouraged risk aversion while fueling the safe-haven attractiveness of the Japanese yen. MUFG Bank said markets are panicking following comments by Fed officials on the US central bank’s focus to aggressively fight inflation. However, there may be some flexibility between regional currencies going forward, as fundamentals in Asia begin to improve and the Covid-19 situation becomes more controlled, MUFG Bank said. USD/JPY slipped 0.4% to 113.77, AUD/JPY fell 0.5% to 82.72 and SGD/JPY fell 0.4% to 84.55.


ANZ said gold prices declined despite continued weakness in the US dollar as higher inflation prompted investors to worry about more drastic action from the Federal Reserve. This week’s data showed an uptick in inflation, and Fed officials have since warned that the central bank will have to hike rates more aggressively this year if inflation remains high during the first half. Many analysts were expecting the Fed to hike rates about three times this year, but the latest comments from officials suggest four hikes are likely. Spot gold fell 0.1% to $1,820.13 an ounce.


Oanda said oil prices fell in early Asian trade as political pressure mounts for the White House to lobby OPEC+ to ensure the group meets its production targets amid supply disruptions. The short-term outlook for travel demand was also likely to be worsened by the spread of the Omicron variant, with Oanda citing Delta CEO Ed Bastian as saying he expects a rebound in travel to be delayed by 60 days. Front-month contract for WTI was down 0.4% at $81.67/bbl, while front-month Brent crude was down 0.4% at $84.08/bbl.

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(END) Dow Jones Newswires

01-13-22 2215ET

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