GLOBAL MARKETS DJIA 31338.15 -46.40 -0.15% Nasdaq 11635.31 13.96 0.12% S&P 500 3899.38 -3.24 -0.08% FTSE 100 7196.24 7.16 0.10% Nikkei Stock 26780.68 263.49 0.99% Hang Seng 21202.46 -523.32 -2.41% Kospi 2342.23 -8.38 -0.36% SGX Nifty* 16117.00 -110.5 -0.68% *Jul contract USD/JPY 137.04-05 +0.70% Range 137.28 135.93 EUR/USD 1.0146-49 -0.39% Range 1.0186 1.0135 CBOT Wheat July $8.792 per bushel Spot Gold $1,740.49/oz -0.1% Nymex Crude (NY) $104.74 $2.01 US STOCKS
The S&P 500 inched lower, avoiding a fifth consecutive session of gains after the latest monthly jobs report beat expectations.
The S&P 500 was down 0.1% while the Dow Jones Industrial Average slipped 0.2%. The tech-focused Nasdaq Composite Index inched up around 0.1%. The Labor Department’s June jobs report showed that rising interest rates and high inflation are so far not affecting hiring, which remains strong. The U.S. economy added 372,000 jobs in June, well above the 250,000 expected by economists surveyed by The Wall Street Journal.
“On one hand, it’s great to see durable demand for jobs, but pressure on the (Federal Reserve) to hike rates will depress the bulls,” said Mike Bailey, director of research at FBB Capital Partners.
ASIAN STOCKS
Japanese stocks were higher, led by gains in tech and electronics stocks after the ruling coalition’s election victory solidified Prime Minister Fumio Kishida’s standing. Investors will focus on any developments in economic policy after former Prime Minister Shinzo Abe was shot dead while campaigning for the election. The Nikkei Stock Average was up 1.7% at 26963.82.
South Korea’s Kospi rose 0.3% to 2357.21 in early trade, supported by auto and biotech stocks. Easing investor worries about a recession following stronger-than-expected U.S. jobs data helped support sentiment, though Korea’s soft preliminary trade data for early July limited the upbeat mood. USD/KRW was 0.3% lower at 1,297.00 on renewed risk appetite.
Hong Kong stocks declined, falling in line with losses in their China counterparts as investors grow increasingly worried about the recent uptick in Covid-19 infections in China. The benchmark Hang Seng Index was down 1.8% at 21336.92. KGI Securities analysts said in a note that the latest resurgence of the virus in several Chinese cities may prove to be a major drag on both business activity and investor sentiment in the near term. Most analysts have flagged Covid-19 as a key swing factor for China’s 2H outlook. Macau casino stocks drove losses on the HSI, as officials suspended most business activities for a week due to the latest Covid-19 outbreak.
China stocks fell, extending their rangebound trading pattern since last week. The benchmark Shanghai Composite Index was down 0.9% at 3326.37, while the Shenzhen Composite Index also shed 0.9% to 2199.68. The ChiNext Price Index slightly underperformed with a 1.0% drop to 2789.24. Huafu Securities analysts said in a note that the market may struggle to find any substantial drivers in the near term, given it has accumulated meaningful gains in June on Beijing’s policy stimulus, the positive impact of which may begin to ease in coming weeks.
FOREX
Asian currencies weakened amid risk-off sentiment driven by losses in some regional equity markets and in U.S. stock futures. The USD could continue to track higher this week as the global economic outlook seems to be deteriorating, said CBA analysts in a research report. U.S. data due this week is likely to show inflation stayed stubbornly high in June, particularly the trimmed mean and weighted median measures, they said. Elevated inflation could encourage the FOMC to raise rates by 75 bps at its next policy meeting later this month, they added. USD/KRW rose 0.5% to 1,301.24 and USD/SGD gained 0.2% to 1.4014 while AUD/USD fell 0.4% to 0.6825.
METALS
Gold edged lower amid USD strength. On the technical charts, gold has had a major downside breakout of pivotal support at $1,785/oz, so a further selloff is expected in the near term, Tina Teng, markets analyst at CMC Markets, said in recent commentary. Gold is now falling into a descending channel on the daily chart, with pivotal resistance at the July 1 low of $1,785/oz, Teng said. If the downward trend continues, subsequent support is likely to be at the 100% Fibonacci extension level of $1,700/oz, the analyst added. Spot gold was down 0.1% at $1,740.49/oz.
OIL SUMMARY
Oil gave up earlier gains in the morning Asian session amid concerns over the latest Covid-19 outbreak in China. The resurgence of the virus and the detection of a new, highly contagious Omicron subvariant in Shanghai will likely be negative for the oil market, SPI Asset Management Managing Partner Stephen Innes says in an email. Shanghai officials have identified one case of the Omicron BA.5.2.1 variant, according to reports over the weekend. Meanwhile, neighboring Macau is set to enter a lockdown early Monday as authorities seek to contain a Covid-19 outbreak there. Front-month WTI crude oil futures fell 0.9% to $103.85/bbl; front-month Brent crude oil futures were 0.7% lower at $106.31/bbl.
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(END) Dow Jones Newswires
July 10, 2022 23:15 ET (03:15 GMT)
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