GLOBAL MARKETS DJIA 30967.82 -129.44 -0.42% Nasdaq 11322.24 194.39 1.75% S&P 500 3831.39 6.06 0.16% FTSE 100 7025.47 -207.18 -2.86% Nikkei Stock 26103.17 -320.30 -1.21% Hang Seng 21733.81 -119.26 -0.55% Kospi 2322.16 -19.62 -0.84% SGX Nifty* 15800.50 34.5 0.22% *July contract USD/JPY 135.23-24 -0.46% Range 135.88 135.14 EUR/USD 1.0264-67 +0.01% Range 1.0274 1.0255 CBOT Wheat July $7.936 per bushel Spot Gold $1,769.39/oz 0.2% Nymex Crude (NY) $99.74 -$8.69 U.S. STOCKS
U.S. stock futures were slightly up in after-hours trading Tuesday after a mixed day for the major indexes. At 6:30 p.m. Eastern time, futures for the S&P 500, Dow Jones Industrial Average, and Nasdaq were up 0.17%, 0.13%, and 0.22%, respectively.
Two of the three major U.S. stock indexes closed higher on Tuesday after the market staged a late-day rally, while oil prices fell on investor concerns that slowing economic growth could curb energy consumption.
The S&P 500 rose 0.2%, or 6.06 points, to 3831.39 on Tuesday to start the trading week after the U.S. stock and bond markets closed for the Independence Day holiday. The Dow Jones Industrial Average lost 0.4%, or 129.44 points, to close at 30967.82. The tech-focused Nasdaq Composite Index shed earlier losses to gain 1.7%, or 194.39 points, to 11322.24.
ASIAN STOCKS
Japanese stocks were lower in morning trade, dragged by falls in energy and financial stocks as concerns continue about the global economic outlook amid high inflation in many parts of the world. Oil explorer Inpex was down 6.5% following drops in crude-oil prices overnight, and Sumitomo Metal Mining was 5.2% lower. Meanwhile, Eisai was up 4.2% after U.S. FDA granted priority review for the application of lecanemab for Alzheimer’s. Policy-related developments were in focus ahead of Japan’s upper-house election on Sunday. The Nikkei Stock Average was down 1.0% at 26162.08.
South Korea’s benchmark Kospi fell 1.2% to 2313.14 in early trade, dragged by losses in energy and shipbuilding stocks. Risk appetite was receding after shares tumbled overnight in London and across Europe because of rising fears of a recession. The won weakened against the greenback on risk aversion. USD/KRW rose 0.8% to hit a 13-year intraday high of 1,311.00. Oil refiners SK Innovation and S-Oil retreated 3.9% and 9.0%, respectively as recession worries mount. Shipbuilders that make oil tankers were mostly lower. Hyundai Heavy Industries shed 6.3% and Daewoo Shipbuilding & Marine Engineering declined 7.2%.
Hong Kong stocks were lower in morning trade, following steep declines in European equities as Bank of England warned of substantially weaker global economic outlook. The benchmark Hang Seng Index fell 0.4% to 21770.94. Though China’s latest PMI data showed improvement, the recent Covid-19 infections across several cities may weigh on recovery pace and raise investor worries over potential tighter curbs, KGI Securities analysts said. Oil majors led the downturn after the WTI price fell below $100/bbl overnight for the first time since early May. Cnooc shed 3.1% and PetroChina was down 3.0%.
Chinese shares were mixed in early trade as investors weigh continued worries of a global recession and high inflation against positive PMI data out of China. The Shanghai Composite Index fell 0.5% to 3385.99, the Shenzhen Composite Index slipped 0.3% to 2226.67 and the ChiNext Price Index gained 0.3% to 2834.56. “The quiet schedule in the economic calendar may also drive some wait-and-see, as we look towards the US ISM non-manufacturing PMI data, along with the FOMC minutes, to provide further hints of recession risks,” IG market strategist Yeap Jun Rong said in a note. Energy stocks are among the worst performers after oil prices slumped overnight. PetroChina lost 3.9%, China Oilfield Services fell 2.8% and Cnooc Energy Technology & Services was 1.5% lower.
FOREX
JPY strengthened against other G-10 and Asian currencies as worries of a recession boost the safe-haven appeal of the Japanese yen. Risk sentiment worsens as recession fears outweigh optimism over U.S.-China talks, said TD Securities in a research note, adding risk-off was in full swing with JPY trading stronger. USD/JPY fell 0.4% to 135.27, AUD/JPY dropped 0.2% to 92.16 and SGD/JPY was down 0.3% at 96.33.
NZD/USD could fall to 0.60 or lower before the end of this month, CBA strategists said in a market commentary, after it sank to 0.6124 overnight–its lowest since May 2020. Dairy commodity prices fell 4.1% in the overnight fortnightly auction, which is a negative cue for NZD, even as the mainstay New Zealand export commodities remain well above long-run average price levels. “Global growth concerns alongside the risk of further lockdowns in China are weighing on dairy prices. The path of least resistance for NZD/USD is down,” CBA said.
METALS
Gold was higher in early Asian trade, after declining overnight on some strength in the U.S. dollar. The minutes of the latest Fed meeting as well as the U.S. labor market data this week would likely remain in focus, Commerzbank analysts said in a note. “The latter in particular have the potential to drive the gold price via the development of the EUR-USD exchange rate,” they added. Spot gold was 0.2% higher at $1,769.39/oz.
OIL SUMMARY
Oil prices were higher in early Asian trade, reversing overnight losses that were driven by fears of a recession. “Oil and industrial metal prices will likely continue to react the most negatively to global growth fears, rising interest rates and a surging US dollar,” CBA analyst Vivek Dhar said in a report. Market focus would also be likely on demand from China, one of the world’s largest oil importers. “A meaningful move away from China’s Covid-zero policy looks unlikely in the near term,” he said. Front-month WTI crude oil futures were 2.3% higher at $101.87/bbl, while Brent gained 2.6% to $105.44/bbl.
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(END) Dow Jones Newswires
July 05, 2022 23:15 ET (03:15 GMT)
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