GLOBAL MARKETS DJIA 34496.51 -144.67 -0.42% Nasdaq 13888.82 -315.35 -2.22% S&P 500 4481.15 -43.97 -0.97% FTSE 100 7587.70 -26.02 -0.34% Nikkei Stock 26807.57 -542.73 -1.98% Hang Seng 22056.90 -23.62 -0.11% Kospi 2703.61 -31.42 -1.15% SGX Nifty* 17769.50 -98.0 -0.55% *April contract USD/JPY 123.65-66 -0.11% Range 123.94 123.47 EUR/USD 1.0906-09 +0.10% Range 1.0915 1.0893 CBOT Wheat May $10.382 per bushel Spot Gold $1,925.01/oz 0.1% Nymex Crude (NY) $97.28 -$4.68 US STOCKS
Tech stocks lost ground as investors digested more details about the Federal Reserve’s plan to raise interest rates.
The technology-focused Nasdaq composite index lost 2.2%. The S&P 500 fell 1%, while the blue-chip Dow Jones Industrial Average slid about 0.4%.
The S&P 500 technology sector fell 2.55%.
Government bonds continued to sell off, with yields rising for a fourth straight session, on the prospect of further rate hikes by the Fed, following the worst quarter for US bonds in more than 40 years.
The Fed raised interest rates in March for the first time since 2018. Minutes of the meeting showed that central bank officials last month considered raising rates by half a point percentage point, but had decided on a quarter-point hike in light of the uncertainty surrounding Russia’s invasion of Ukraine.
Japanese stocks were lower in morning trade, led by electronics and auto stocks, as concerns persisted over the pace of Fed tightening and rising corporate borrowing costs. Fed officials signaled they could raise rates by half a percentage point when they meet early next month. Investors remain focused on the war in Ukraine and its impact on commodity prices. The Nikkei Stock Average fell 1.7% to 26,886.17.
South Korea’s Kospi fell 0.7% to 2,715.73 in early trading, following Wall Street’s decline overnight. Minutes from the Fed signaling that half-percentage-point rate hikes are on the table weighed on investor sentiment. Most growth stocks, including technology and internet companies, fell on the growing likelihood of aggressive policy tightening from the US central bank.
Hong Kong’s Hang Seng index rose 0.6% to 22,219.92, reversing opening losses, on hopes of supportive policies from China. There appear to be expectations that the Chinese government will support economic growth via monetary policy such as lowering the RRR, KGI Research said. The Hang Seng TECH index rose 1.4% to 4649.18.
Chinese stocks were down in morning trade, following broad declines among other regional stocks. The Shanghai Composite Index fell 0.2% to 3275.81, the Shenzhen Composite Index fell 0.4% to 2119.89 and the ChiNext Price Index fell 0.7% to 2616.49. Developments of the coronavirus in China remain in focus as the number of cases rises despite tighter restrictions. “Unfortunately, there are few signs that the virus situation will be contained anytime soon,” Commerzbank said, noting that the government is struggling to find a balance between containing the virus and dealing with economic difficulties.
The yen strengthened against most G-10 and Asian currencies amid risk aversion spurred by overnight losses on Wall Street and this morning’s declines in futures on US stocks. The Asian session faces some downward pressure as market participants continue to digest rate increases and balance sheet liquidation at upcoming FOMC meetings, IG said. That could remain a focus given a relatively quiet economic calendar today as more comments from Fed officials are expected, IG added. AUD/JPY fell 0.4% to 92.61, SGD/JPY edged down 0.1% to 90.94 and USD/JPY fell 0.1% to 123.64 .
Gold edged higher in early Asian trading, supported by likely technical buying despite headwinds from expected Fed rate hikes. “Gold’s pain from aggressive monetary tightening is almost fully priced in,” Oanda said. However, an “aggressive hawkish Fed could tentatively send gold below the $1,900 level,” he said. “Gold will eventually become attractive once traders begin to wonder whether the Fed will choose to continue to fight inflation after a few big rate hikes or to rein in as growth concerns surface. “, added Oanda. Spot gold rose 0.1% to $1,925.01 an ounce.
Oil rose early in Asian trading, recouping some of their losses after the International Energy Agency announced another release of crude from its emergency stockpiles, ANZ Research said. The bank said prices remain supported as the IEA warns of a sharp drop in Russian oil exports that could leave the global crude market short by 3 million barrels a day. “Restrictions on Russian oil exports appear to be tightening,” he said. “The likelihood of Iranian oil helping to fill the void is also diminishing,” ANZ added. First-month Brent gained 1.1% to $102.21/bbl, while WTI rose 1.0% to $97.23/bbl.
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(END) Dow Jones Newswire