Indian Morning Briefing: Asian Markets Mostly Lower at Start of the Week

GLOBAL MARKETS
DJIA         35061.55   238.20   0.68%
Nasdaq       14836.99   152.39   1.04%
S&P 500       4411.79    44.31   1.01%
FTSE 100      7027.58    59.28   0.85%
Nikkei Stock 27936.20   388.20   1.41%
Hang Seng    26816.93  -505.05  -1.85%
Kospi         3246.05    -8.37  -0.26%
SGX Nifty*   15744.50  -109.5   -0.69%
*July contract

USD/JPY  110.35-36   -0.18%
Range    110.58   110.33
EUR/USD  1.1775-78   +0.04%
Range    1.1779   1.1764

CBOT Wheat Sept $6.840 per bushel
Spot Gold     $1,805.50   0.2%
Nymex Crude (NY) $72.03  $0.12


U.S. STOCKS

U.S. stocks rallied Friday, pushing the Dow Jones Industrial Average across the 35000 closing milestone for the first time, in a striking rebound from major indexes' pullback earlier this week.

All three major U.S. stock indexes finished Friday at all-time highs after each posted weekly gains of more than 1%.

The S&P 500 finished Friday up 44.31 points, or 1%, to close at 4411.79, notching a 2% gain for the week and its 40th record close for the year. The Dow Jones Industrial Average added 238.20 points, or 0.7%, to close at 35061.55, marking a 1.1% weekly gain. The climb past 35000 marked the index's fastest 5,000-point gain to a new milestone, according to Dow Jones Market Data, taking only 165 trading days, including Friday, to climb from 30000.

The Nasdaq Composite, meanwhile, gained 152.39 points, or 1%, Friday, to finish the week at 14836.99. The technology- heavy index rallied 2.8% for the week.

ASIAN STOCKS

Japanese stocks were broadly higher, led by strong gains in energy and steel stocks, partly on hopes for an earnings recovery and a weaker yen. Corporate earnings as well as Covid-19 infection trends during the Tokyo Olympics were being closely watched. The Nikkei Stock Average was up 1.7% at 28017.08.

South Korea's stock benchmark Kospi was down 0.2% at 3246.86 in mixed early trading after opening higher. Losses in travel and shipbuilding companies were outweighing gains in internet and biotech firms in the morning trade. Worries about a surge in Covid-19 cases and the fast spread of the Delta variant in the country were curbing optimism about an economic recovery. Index heavyweight Samsung Electronics edged down 0.1%.

Hong Kong's Hang Seng Index was down 2.3% to 26693.08, weighed by technology and education stocks amid worsening regulatory concerns. Education stocks would take a hit as China has barred after-school companies from raising money via IPOs, KGI Securities said. New Oriental Education fell 34% and Koolearn Technology was 32% lower. Tencent Holdings was down 4.2% after it was ordered to end its exclusive music licensing rights with global record labels while Alibaba Group slumped 3.9%.

Chinese stocks fell in morning trade, dragged by liquor makers and property developers. Huaxi Securities noted recent official rhetoric about further regulating the real-estate sector and holding accountable cities where house prices were rising too rapidly. The Shanghai Composite Index dropped 1.3% to 3503.37, the Shenzhen Composite Index was 1.1% lower and the ChiNext Price Index fell 1.7%. FOREX

Asian currencies were expected to continue to perform well against the USD in the medium term as economies reopen, said Kenneth Akintewe, Head of Asian Sovereign Debt at Aberdeen Standard Investments. While investors can expect the market environment to remain choppy, Aberdeen remained constructive on Asian currencies due to a correction since the start of 2021. "Asia's lower volatility and underlying fiscal strengths make it more comfortable to do so," Akintewe said. While, Aberdeen was more cautious about taking short-dollar risk, it had seized on bouts of risk aversion to take mid to long-term positions selectively in currencies including KRW, CNY, INR and MYR, the asset manager said.

USD/JPY's near-term outlook may hinge on Fed Chairman Jerome Powell's views on the economic outlook, IG said. The two- day U.S. central bank policy meeting is set to start Tuesday. Any cautious views on the economy by Powell was likely to cause dollar-selling, IG said. Still, any selling of the greenback could be short-lived since the Fed is moving toward policy normalization, it added. USD/JPY's downside may also be limited so long as U.S. stock markets maintain much of their recent gains, IG said. USD/JPY was at 110.36, down from 110.55 late Friday in New York, due partly to mild profit- taking after recent gains. METALS

Gold rose in early Asian trade as signs of dovishness from the Federal Reserve and the European Central Bank supported safe-haven assets, ANZ said. The precious metal was holding above $1,800/oz, a level at which it previously encountered resistance. Yet, with bond yields rising, demand for the non-interest bearing metal could reduce, ANZ said. It said that investors were now turning their attention to the upcoming FOMC meeting for indications of when policymakers could scale back asset purchases. Spot gold was up 0.2% to $1,805.50/oz. OIL SUMMARY

Oil prices fell in early Asian trade as concerns over the Delta variant's spread in some Asian markets continued to weigh. The rapid spread of the variant could lead to more local lockdowns and slow the speed of the economic recovery, Commerzbank said. The recent OPEC+ agreement to increase oil supply was also bearish for crude in the short term, but it shouldn't weigh significantly amid tight fundamentals, Commerzbank said. "Despite the expansion in oil supply, the oil market will remain slightly undersupplied until the end of the year." Front-month Brent fell 0.5% to $73.76/bbl; front- month WTI also dropped 0.5% to $71.74/bbl.

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  (END) Dow Jones Newswires
  07-25-21 2315ET
  Copyright (c) 2021 Dow Jones & Company, Inc.

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