Asian markets lose ground after Fed minutes

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.

 
 
ASIAN STOCKS 

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.

 
FOREX 

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 .

 
METALS 

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 SUMMARY 

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.

 
 
TOP HEADLINES 
Tech Stocks Sink, Bonds Sell Off as Investors Study Fed Minutes 
Fed Signals Half-Percentage-Point Rate Increases Could Be Warranted at Coming Meetings 
Ukraine Braces for Intense Battles in Eastern Donbas 
U.S. Allies to Release Close to 60 Million Barrels of Oil From Reserves 
Russia, U.S. Face-Off Boosts Default Risk 
Regulatory Uncertainty Is a Barrier for Wider Bitcoin Adoption 
Fed's Patrick Harker Expects Steady, Deliberate Path of Rate Rises 
House Votes to Hold Scavino, Navarro in Contempt of Congress 
Judge Acquits Man of Charges Linked to Jan. 6 Capitol Riot 
Shanghai Residents Plead for Help Online as Daily Covid-19 Count Grows 
Biden Mixes With Crowds as Covid-19 Cases Hit White House 
Biden Preparing to Announce Pair of SEC Nominees 
Justice Department Charges Russian Oligarch With Sanctions Violations 
Samsung Forecasts Record First-Quarter Revenues 
Elon Musk Stirs Twitter Interest as Social-Media Platform Hunts Growth 
JD.com Names Lei Xu as CEO 
SEC Is Investigating How Amazon Disclosed Business Practices 
Oil Executives Reject Price-Gouging Accusations 
Better.com Asks Employees to Quit After Two Rounds of Layoffs 
Twitter Says It Is Working on an Edit Button 
Google Bans Apps With Hidden Data-Harvesting Software 
Pinterest Will Remove Content Deemed Climate-Change Misinformation 
Glaxo to Curb Drugstore Staples in Russia as It Walks Ethical Tightrope 
 
 

(END) Dow Jones Newswire

04-06-22 2315ET

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