Indian Morning Briefing: Asian markets fall on 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 

U.S. stocks rallied on Tuesday after slowing supplier price increases provided more evidence that inflationary pressures may be easing.

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

The S&P 500 rose 34.48 points, or 0.9%, to 3,991.73. The Dow Jones Industrial Average added 56.22 points, or 0.2%, to 33,592.92. The Nasdaq Composite jumped 162.19 points, or 1.4%, to 11,358.41 as tech stocks extended their recent run.

 
 
ASIAN STOCKS 

Japanese stocks were flat in early trading as investors continued to assess data showing the Japanese economy contracted for the first time in a year in Q3, and signs that inflationary pressures may be easing after US producer prices rose less than expected. Investors could also focus on renewed geopolitical tensions after a missile attack on Poland. Apparel retailers were mixed. The Nikkei Stock Average was flat at 27978.01.

South Korea’s benchmark, the Kospi, fell 0.9% to 2457.02 in early trade, led by losses in chemical and steel stocks. The index opened a higher start after Wall Street’s overnight gains on more signs of easing US inflation. But caution quickly stepped in to reverse the gains as investors looked to see if the war in Ukraine could turn into a wider conflict after a missile hit a Polish village. USD/KRW was up 0.3% at 1,321.60.

Hong Kong stocks were weaker in morning trading, pulling back from the rally since last Friday when China partially eased quarantine requirements. The benchmark Hang Seng lost 1.0% to 18159.24. Chinese developers led the slowdown. Agile was among the top decliners with a 12% decline, after disclosing plans to place shares at a discount to its last closing price. Analysts at Central China International Securities warned of continued uncertainties over HSI’s ability to sustain its longer-term rebound momentum as the risk of a global economic downturn persists.

Chinese stocks were weaker in early trading as liquor stocks weighed and the mood was clouded by worries about 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 occur, we believe that a significant shift away from zero-Covid will not occur until after March 2023,” they added. Abroad, tensions were fueled by reports of a possible missile strike in Poland.

FOREX 

Most Asian currencies weakened against the dollar in the Asian morning session on risk aversion spurred by reports of a missile strike in Poland. According to ING economists, unconfirmed reports point to an explosion in Poland near the Ukrainian border, which was allegedly caused by a Russian missile. USD/KRW rose 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 were little changed at the start of Asian trading. “Gold prices are stabilizing as Wall Street appears poised to wait and see if inflation continues to decline,” Oanda said. Although the main resistance for the precious metal is around $1,800, it “could prove difficult to reach unless we see a major decline in the dollar,” he added. Meanwhile, heightened geopolitical tensions following a missile attack on Poland could spur the search for refuge. Spot gold was flat at $1,778.85/oz.

OIL SUMMARY 

Oil prices were slightly higher at the start of Asian trading. Renewed geopolitical tensions following a missile attack on Poland would likely be the focus. A key pipeline carrying Russian oil to Eastern Europe was also disrupted after the power cut, affecting flows to Hungary, the Czech Republic and Slovakia, ANZ analysts said. This preceded European sanctions on imports of Russian crude oil on December 5, they added. First-month WTI and Brent futures were each up 0.1% at $87.01/bbl and $93.94/bbl, respectively.

 
 
TOP HEADLINES 
 
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This Thanksgiving Is Expected to Be One of the Busiest for Travel in Decades 
 
 

(END) Dow Jones Newswire

November 15, 2022 10:15 p.m. ET (03:15 GMT)

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

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