Indian Morning Briefing: Asian Markets Mostly Higher, Tracking Wall Street's Overnight Gains

GLOBAL MARKETS 
DJIA             32812.50    416.33     1.29% 
Nasdaq           12668.16    319.40     2.59% 
S&P 500           4155.17     63.98     1.56% 
FTSE 100          7445.68     36.57     0.49% 
Nikkei Stock     27913.62    171.72     0.62% 
Hang Seng        20177.05    409.96     2.07% 
Kospi             2474.88     13.43     0.55% 
SGX Nifty*       17496.00      56.5     0.32% 
*Aug contract 
 
USD/JPY    133.79-80    -0.05% 
Range      134.14   133.43 
EUR/USD    1.0164-67    -0.01% 
Range      1.0178   1.0156 
 
CBOT Wheat Sept $7.636 per bushel 
Spot Gold 0.1% $1,767.11/oz 
Nymex Crude (NY) $90.91 -$3.51 
 
 
US STOCKS

U.S. stocks rose, the major indexes’ first winning session in August, on the strength of fresh earnings reports and after a key reading on the services sector hit a three-month high.

The S&P 500 rose 1.6%, recouping some losses after falling Monday and Tuesday. The Dow Jones Industrial Average added 1.3%. The tech-heavy Nasdaq Composite Index gained 2.6%. A key economic report helped boost sentiment. The U.S. services sector continued to expand in July, according to a report from the Institute for Supply Management.

Earnings have been pretty good in terms of beating expectations, said Olivier Marciot, global macro portfolio manager at Unigestion, but the market has bigger problems as well. “There is still a lot of inflation, central banks are keeping that hawkish rhetoric and we get some geopolitics on top of that,” he said.

 
 
ASIAN STOCKS

Japanese stocks were higher in morning trade, led by gains in electronics stocks as concerns over energy costs abate. Earning were in focus, with Toyota Motor set to announce results later in the day. The Nikkei Stock Average was up 0.9% at 27992.75.

South Korea’s Kospi rose 0.5% to 2473.96 in early trade, tracking Wall Street’s rally overnight. Internet, travel and tech stocks were leading gains, following the advance of large-cap U.S. tech companies. Quarterly earnings from local airlines and platform companies are trickling out this week.

Hong Kong’s Hang Seng Index rose 2.1% to 20189.84 in morning trade, tracking Wall Street gains overnight. A surprise rebound in the U.S. July ISM services index has helped investors shake off worries that the U.S. has already fallen into a recession, KGI Research said in morning commentary. But there are concerns that geopolitical tensions may persist, which could curb the local equity-market’s upside, KGI Research added.

Chinese shares were higher in early trade, stabilizing after two days of losses on geopolitical tensions amid U.S. House Speaker Nancy Pelosi’s Asia tour. Gainers included electronics, pharma and mining stocks. The real-estate sector was broadly higher. The Shanghai Composite Index added 0.6% to 3181.84, the Shenzhen Composite Index climbed 0.7% and the ChiNext Price Index was 0.7% higher.

FOREX

Asian currencies were mixed against USD in the morning Asian session, but could be weighed by concerns of Fed tightening. Fed officials continue to deliver a hawkish message, said Kristina Clifton, senior economist & currency strategist at CBA, in a research report, noting overnight comments from the Fed’s Kashkari and Bullard. FOMC members in speeches, the FOMC minutes and the U.S. CPI report next week are expected to make the case that the Fed Funds rate has considerable upside from current levels, Clifton added. USD/KRW edged 0.1% higher to 1,309.06, AUD/USD was up 0.1% at 0.6956 and USD/JPY was down 0.1% at 133.75.

METALS

Gold prices were steady in the early Asian session, but may be weighed by risk appetite spurred by overnight gains on Wall Street and strong U.S. economic data, analysts said. But, the main driver for gold will probably be Wall Street’s assessment of how many more massive rate increases the Fed will conduct until it enters a period of keeping policy steady, said Oanda senior market analyst Edward Moya in an email. It looks like the chances of a 75bp rate increase at the FOMC’s September meeting are very much on the table, Moya added. Spot gold was up 0.1% at $1,767.11/oz.

OIL SUMMARY

Oil rose early in the Asian session in a likely technical rebound after front-month WTI futures ended at a nearly six-month low overnight. However, TD Securities’ analysis shows that, despite factors such as still very low product and crude inventories, the recent loosening in global supply-demand conditions and demand risks coming from the U.S. and China suggest crude oil could move materially below the $90/bbl level, said Bart Melek, the brokerage’s head of commodity strategy, in a research report. Front-month WTI futures were 0.6% higher at $91.20/bbl; front-month Brent futures were 0.5% higher at $97.30/bbl.

 
 
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(END) Dow Jones Newswires

August 03, 2022 23:15 ET (03:15 GMT)