Indian morning briefing: Asian markets slide amid new geopolitical tensions

GLOBAL MARKETS 
DJIA         33592.92    56.22   0.17% 
Nasdaq       11358.41   162.19   1.45% 
S&P 500       3991.73    34.48   0.87% 
FTSE 100      7369.44   -15.73  -0.21% 
Nikkei Stock 27868.16  -122.01  -0.44% 
Hang Seng    18206.99  -136.13  -0.74% 
Kospi         2466.60   -13.73  -0.55% 
SGX Nifty*   18465.00   -29.5   -0.16% 
*Nov contract 
 
USD/JPY 139.95-96   +0.47% 
Range   140.00   138.75 
EUR/USD 1.0375-78   +0.26% 
Range   1.0387   1.0332 
 
CBOT Wheat Dec $8.282 per bushel 
Spot Gold    $1,778.85/oz Unch 
Nymex Crude (NY) $86.77  $0.90 
 
 
U.S. STOCKS 

US stocks rose on Tuesday after slowing supplier price hikes offered further evidence that inflationary pressures may be easing.

The gains were large, with nine of the 11 sectors of the S&P 500 advancing. Stocks from technology to energy to consumer staples ended the day higher.

The S&P 500 rose 34.48 points, or 0.9%, to 3991.73. The Dow Jones Industrial Average added 56.22 points, or 0.2%, to 33592.92. The Nasdaq Composite jumped 162.19 points, or 1.4%, to 11358.41 as tech stocks extended their recent run.

 
 
ASIAN STOCKS 

Japanese equities remained flat in early trading as investors continued to assess data showing the Japanese economy contracted for the first time in a year in the 3rd quarter and signs that inflationary pressures could ease after that. US producer prices rose less than expected. Investors may also focus on renewed geopolitical tensions after a missile attack on Poland. Clothing retailers were mixed. The average Nikkei stock remained flat at 27978.01.

South Korea’s benchmark Kospi fell 0.9% to 2457.02 in early trading, led by losses in chemical and steel stocks. The index opened higher after Wall Street’s overnight gains on further signs of easing inflation in the US. But caution was quick to reverse the gains, as investors were looking to see if the war in Ukraine could escalate into a wider conflict after a missile hit a Polish village. USD/KRW rose 0.3% to 1,321.60.

Hong Kong shares fell in morning trade, retreating from last Friday’s rally as China eased some quarantine requirements. The benchmark Hang Seng index fell 1.0% to 18159.24. Chinese developers have driven the recession. Agile was among the front runners with a 12% drop after unveiling plans to place the stock at a discount to its latest closing price. Analysts at Central China International Securities warned of continued uncertainty about HSI’s ability to sustain its recovery momentum over the long term, as the risk of a global economic downturn remained.

Chinese stocks fell in early trading as liquor stocks weighed and sentiment was clouded by concerns over renewed geopolitical tensions and the Chinese economy. Commerzbank analysts said the country’s economy could remain under pressure after Tuesday’s activity data indicated weakness in consumption and services. “While the recent easing of Covid restrictions signals that further easing may be on the way, we believe a significant move away from zero-Covid will only occur after March 2023,” they added. Abroad, tensions were fueled by reports of a possible missile attack in Poland.

FOREX 

Most Asian currencies weakened against the USD during the Asian morning session on risk aversion spurred by news of a missile attack in Poland. There have been unconfirmed reports of an explosion in Poland near the Ukrainian border, thought to have been caused by a Russian missile, ING economists said. USD/KRW was up 0.5% to 1,323.72 and USD/THB gained 0.3% to 35.67 while AUD/USD fell 0.2% to 0.6745.

METALS 

Gold prices had changed little in early Asian trading. “Gold prices are stabilizing as Wall Street seems to be waiting to see if inflation continues to fall,” Oanda said. While the precious metal’s main resistance was around $1,800, “it could prove difficult to hit unless we see a major downward move with the dollar,” she added. Renewed geopolitical tensions following a rocket attack on Poland, meanwhile, could spur a search for refuge. Spot gold was stable at $1,778.85/ounce.

OIL SUMMARY 

Oil prices were slightly higher in early Asian trade. Renewed geopolitical tensions following a rocket attack on Poland would likely take center stage. A key pipeline carrying Russian oil to Eastern Europe was also disrupted after a power outage, affecting flows to Hungary, the Czech Republic and Slovakia, ANZ analysts said. This came ahead of European sanctions on imports of Russian crude on Dec. 5, they added. First-month WTI and Brent futures each rose 0.1%, to $87.01/bbl and $93.94/bbl, respectively.

 
 
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(END) Dow Jones Newswires

November 15, 2022 at 10:15 PM ET (03:15 GMT)

Copyright (c) 2022 Dow Jones & Company, Inc.

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