Indian Morning Briefing: Asian Markets Mostly Lower

GLOBAL MARKETS
DJIA           35100.00   -269.09    -0.76%
Nasdaq         15374.33     10.81     0.07%
S&P 500         4520.03    -15.40    -0.34%
FTSE 100        7149.37    -37.81    -0.53%
Nikkei Stock   30122.11    205.97     0.69%
Hang Seng      26529.53    175.90     0.67%
Kospi           3176.36    -11.06    -0.35%
SGX Nifty*     17425.50     46.5      0.27%
*Sep contract

USD/JPY    110.26-27    -0.02%
Range      110.33   110.25
EUR/USD    1.1846-49    +0.04%
Range      1.1854   1.1841

CBOT Wheat Sep   $7.086 per bushel
Spot Gold    $1,796.93/oz    0.2%
Nymex Crude (NY)   $68.38     -$0.91


US STOCKS

The S&P 500 declined as investors worried that the spread of Covid-19 will weigh on economic growth.

The S&P 500 fell 0.3%, while the Dow Jones Industrial Average retreated 0.8%. The tech-heavy Nasdaq Composite added 0.1%.

The increase in Covid-19 cases this summer has prompted many employers to postpone plans to return to the office. The travel industry's hopes for a resurgence in business trips also appear to be on hold.

In a fresh sign that the surge of the Delta variant is hindering the economic recovery, the Labor Department's employment report on Friday showed the pace of hiring in the U.S. slowed significantly in August.

ASIAN STOCKS

Japan's Nikkei Stock Average was up 0.1% at 29953.18 in early trade, led by gains in tech and e-commerce stocks, as hopes continue for economic stimulus. Investors are focusing on any developments over the leadership election for the ruling Liberal Democratic Party set for later this month.

South Korea's Kospi was 0.6% lower at 3169.92 in early trade, tracking U.S. stocks, which declined overnight on Covid- 19 concerns. Korean fintech platforms are likely to be in focus, following comments from the Financial Services Commission saying that the cross-sales business of these platforms currently don't comply with the act on the protection of financial consumers.

Hong Kong's Hang Seng Index gained 0.1% to 26390.05, led by rises in tech shares. Hong Kong may reopen the border for some China and Macau-based residents, which could be positive for retail stocks, KGI Securities said. The government plans to allow up to 2,000 visitors a day to enter Hong Kong, although tourists will still need to produce a negative Covid-19 test prior to arrival.

Chinese stocks were higher in early trade after opening mixed, helped by gains in bank stocks. The Shanghai Composite Index rose 0.1% to 3681.29, extending gains after closing at a six-month high on Tuesday. The Shenzhen Composite Index added 0.3% to 2497.62 and the ChiNext Price Index--a measure for emerging industries and startups--gained 0.5% to 3266.46. Chinese trade data from Tuesday showed better-than-expected trade flows in August, with exports and imports rising 25.6% and 33.1% on year, respectively, which is likely helping support sentiment, OCBC said. FOREX

AUD/USD settled around a cent lower after the RBA's decision late Tuesday to proceed with the taper of asset purchases, while extending purchases until mid-February 2022. Still, CBA said it doesn't expect the dovishness around the taper to have a sustained impact on AUD. AUD/USD has been dominated by the USD over the past month. The increasing likelihood that the FOMC will delay its taper will likely contain losses and provide some support to AUD/USD.

Meanwhile, Capital Economics said AUD/USD is set to weaken over the remainder of the year, despite the RBA's QE taper decision on Tuesday. Even though the RBA has begun to normalize monetary policy well in advance of the Fed, CE sees downside risk. China's economic growth is on a downward trajectory; the country is a key source of demand for Australia's commodity exports, and slower growth there has weighed on prices of these commodities lately, CE said. Lower commodity prices will be a headwind for AUD for the rest of the year, it added. METALS

Gold rebounded in Asian trade, after declining overnight on a stronger USD and higher bond yields, which weighed on investor demand for the precious metal. Gold appears to be lacking near-term positive catalysts at the moment, and any rise and fall in prices will depend on the strength of the greenback, Oanda said. Spot gold was 0.2% higher at $ 1,796.93/oz. OIL SUMMARY

Oil rose in early Asian trade after declining overnight on a stronger USD, which weighed on investor appetite. The market is likely to focus on the speed of recovery of U.S. oil production in the Gulf of Mexico following Hurricane Ida, Commerzbank said. More than 90% of production was still shut down five days after the hurricane, it said. "This means that the market was still lacking around 1.7 million barrels of crude oil per day," the bank said. Front-month WTI crude oil futures were recently 0.3% higher at $68.56/bbl, while Brent crude rose 0.1% to $71.73/bbl.

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  (END) Dow Jones Newswires
  09-07-21 2315ET
  Copyright (c) 2021 Dow Jones & Company, Inc.

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