Indian Morning Briefing: Asian Markets Broadly Lower Amid Holiday Thinned Trading

GLOBAL MARKETS
DJIA         34584.88   -166.44   -0.48%
Nasdaq       15043.97   -137.96   -0.91%
S&P 500       4432.99    -40.76   -0.91%
FTSE 100      6963.64    -63.84   -0.91%
Nikkei Stock  Closed
Hang Seng    24134.54   -786.22   -3.15%
Kospi          Closed
SGX Nifty*   17443.00   -158.5    -0.90%
*Sept contract

USD/JPY 109.88-89   -0.10%
Range   110.04   109.89
EUR/USD 1.1714-17   -0.09%
Range   1.1735   1.1711

CBOT Wheat Dec $7.086 per bushel
Spot Gold     $1,752.40/oz  -0.1%
Nymex Crude (NY) $71.98    -$0.63


U.S. STOCKS

U.S. stocks fell and bond yields rose as new data on consumer sentiment was slightly below expectations, raising fresh questions about the pace of economic growth and the inflation outlook.

The S&P 500 dropped 40.76 points, or 0.9%, to 4432.99, pushing the index into the red for the week. The Nasdaq Composite fell 137.96 points, also losing 0.9%, to 15043.97 and the Dow Jones Industrial Average declined 166.44 points, or 0.5%, to 34584.88.

For the week, the S&P 500 lost 0.6%, extending its losing streak to two weeks. While it is down only 2.3% over that stretch, it represents the largest two-week percentage decline since the week ending Feb. 26, according to Dow Jones Market Data.

The Nasdaq dropped 0.5% on the week, and the Dow slipped 0.1%.

ASIAN STOCKS

Markets in Japan, China and South Korea are closed Monday for a holiday.

Hong Kong's Hang Seng Index fell 2.5% to 24293.60 in early trade, as property developers led losses. Four of the index's five biggest losers were developers, with Henderson Land slumping 11%, and Sun Hung Kai Properties and New World Development each sliding more than 8% and CK Asset Holdings 7.6% lower. Beijing has asked local property magnates to back the central government's interests and help solve the housing shortage, Reuters reported. The Hang Seng TECH Index shed 2.4% to 6298.11, with Tencent Holdings 2.1% weaker and Alibaba Group down 1.4%. The A-share market is closed for a holiday, meaning Hong Kong stock market liquidity will likely be sluggish, KGI Securities said.

Singapore shares were flat in early trade, following a weak lead from Wall Street on Friday, as industrial stocks weighed. Investors were paying attention to rising Covid-19 infections in the country, which saw more than 1,000 daily new cases recorded over the weekend.

Malaysia's benchmark Kuala Lumpur Composite Index fell 0.3% to 1543.83 due to lukewarm trading interest, TA Securities said. The current situation may persist given uncertainties over the adverse earnings impact on banks arising from interest-free loan moratoriums, the brokerage said. Potential corporate windfall tax on listed companies supernormal profits due to the pandemic may also weigh on sentiment. Stronger evidence of a sustained recovery in the local pandemic situation would be key to strengthen economic recovery plays, TA added. FOREX

USD and JPY strengthened against G-10 and regional currencies amid haven demand as trading was somewhat thinned by holidays in some Asian countries. Risk appetite has been dented as markets await the coming Fed meeting, ANZ said. Markets also continue to debate growth prospects amid continuing global disruptions from the Delta variant, developments in China and the expected Fed taper, ANZ added. USD/KRW climbed 0.8% to 1,191.42 while AUD/USD slipped 0.5% to 0.7231. AUD/JPY dropped 0.5% to 79.48 and EUR/JPY was down 0.2% at 128.74.

Risks for USD were skewed to the downside, said CBA, ahead of the Thursday's FOMC meeting. It expects the Fed to leave policy unchanged and any dovish messaging could weigh on USD. "The setback in the labour market recovery in August and the jump in serious infections will encourage the FOMC to wait before it announces it will taper its asset purchases," CBA said. GBP/USD has upside risk if more MPC members come out in support of curtailing BoE's asset purchases, it said. AUD and NZD would be largely driven by USD direction while USD/JPY was unlikely to be moved by Wednesday's BOJ meeting. Liquidity could be thin in Asia due to holidays, CBA added. METALS

Gold was little changed in early Asian trade, but could be weighed by rising U.S. Treasury yields. "Gold is still in trouble," Oanda said. "Gold's worst enemy is surging Treasury yields and right now that trade is gaining momentum." It said the precious metal was still vulnerable to technical selling and wasn't likely to attract buyers until it fell to the $1,700-an-ounce mark. Spot gold was down 0.1% at $1,752.40 an ounce. It has fallen about 3.4% so far this month. OIL SUMMARY

Oil was lower in early Asian trading amid the return of U.S. crude supply after Hurricanes Ida and Nicholas made landfall in the Gulf of Mexico, Rystad Energy said. "We see a production loss of about 850,000 bpd for the third week of September, then going down to 180,000-200,000 bpd in the fourth week," it said. The easing of supply disruptions comes amid Covid-19 outbreaks in crude importers China and Japan, which are likely to hamper oil demand recovery, it added. Front-month Brent was 0.3% lower at $75.09/bbl, while front-month WTI fell 0.4% to $71.68/bbl.

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  (END) Dow Jones Newswires
  09-19-21 2315ET
  Copyright (c) 2021 Dow Jones & Company, Inc.

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