Indian Morning Briefing: Asian Markets Mixed; Earnings in Focus

DJIA              35741.15     64.13     0.18%
Nasdaq            15226.71    136.51     0.90%
S&P 500            4566.48     21.58     0.47%
FTSE 100           7222.82     18.27     0.25%
Nikkei Stock      29101.31    500.90     1.75%
Hang Seng         26078.71    -53.32    -0.20%
Kospi              3040.54     20.00     0.66%
SGX Nifty*        18221.00      23.0     0.13%
*Nov contract

USD/JPY    113.93-94   +0.20%
Range      113.94   113.69
EUR/USD    1.1598-601  -0.09%
Range      1.1615   1.1598

CBOT Wheat Dec $7.594 per bushel
Spot Gold  $1,803.17/oz  -0.2%
Nymex Crude (NY) $83.47  -$0.29


U.S. stocks rose, with the S&P 500 and Dow Jones Industrial Average closing at record highs.

Stocks flitted between small gains and losses in early trading, but were decisively higher by afternoon. The S&P 500 ticked up 0.5% as of 4 p.m. ET, and the Dow Jones Industrial Average advanced 0.2%. Both topped records hit last week.

The Nasdaq Composite Index added 0.9% as technology stocks gained to start the week.

Strong earnings from banks, consumer companies and manufacturers have soothed investors' concerns about higher inflation and labor shortages. Now all eyes are set on technology stocks, which have a weighting of nearly 30% in the S&P 500.

Facebook reported third-quarter results after markets closed. Microsoft, Twitter and Alphabet, Google's parent company, are scheduled for Tuesday. Apple and are expected to report later in the week.


Japan's Nikkei Stock Average jumped 1.6% to 29053.62, led by strong gains in tech, electronics and auto stocks, thanks partly to hopes for an earnings recovery from the Covid-19 pandemic. Earnings were being closely watched, with Nidec and Canon Inc. set to report their results later in the day.

South Korea's Kospi rose 0.3% to 3030.75 in early trade, led by electronics, energy and biotech stocks. Solid earnings reports from some large-cap shares were supporting investor sentiment. Memory-chip manufacturer SK Hynix rose 2.0% on above-consensus 3Q results released before the opening bell, while flat-screen maker LG Display climbed 2.3% ahead of its earnings release Wednesday. Index heavyweight Samsung Electronics was 0.4% higher ahead of its earnings report later in the week.

Hong Kong's Hang Seng Index rose 0.4% to 26234.94. EV stocks could outperform during the session after Tesla's stock hit a record high, KGI Securities said. KGI estimated the HSI's support at 25840.

Chinese stocks were higher in early trade, tracking broad gains among other Asian equities. Sentiment in Asian markets was largely mirroring the strong performance in Wall Street overnight, IG said, though it noted that China's Covid-19 situation remained in focus as the government tightened control measures. The Shanghai Composite Index rose 0.2% to 3616.07, the Shenzhen Composite Index gained 0.3% to 2441.39, while the ChiNext Price Index--a measure for emerging industries and startups--was 0.6% higher at 3359.50.


The US dollar strengthened 0.3% against the euro and 0.1% against the yen. The WSJ Dollar Index rose slightly. A rates selloff has triggered enyasu, or a weak yen, Goldman Sachs said. The bank said that relative to G10 peers, the yen is more sensitive to changes in longer-dated rates, and this "has been especially true since 2016, when the BoJ implemented its YCC framework, which caps nominal yields and thereby acts as an amplifier when rates in the rest of the world are on the move. In this context, the recent sharp selloff in the yen has been right in line with shifts in other asset classes." Given the relatively more aggressive policy expectations now priced across the G10, "we see a higher bar for the USD/JPY rally to continue much further."


Gold declined in early Asian trade, reversing overnight gains. IG said the precious metal has scope to rise, however, noting catalysts, such as expectations for more persistent inflation in the U.S., as well as the downplaying of the relationship between tapering and rate hikes ahead of the Federal Open Market Committee meeting next week. The brokerage also noted that gold has now gone past the key $1,800 level, and this may turn out to be a support level to watch. Spot gold was 0.2% lower at $1,803.17/oz.


Oil rose in Asian trading amid reports that the European Union will hold discussions with Iran later this week, ANZ said. This is a prelude to broader talks in Vienna on how to revive the 2015 nuclear deal. Meanwhile, OPEC also appears to be concerned about how rising Covid-19 cases may affect oil demand, leading Saudi Arabia to suggest that producers shouldn't take the rise in prices for granted as demand recovery still looks fragile, ANZ said. Front-month WTI crude oil and Brent crude each rose 0.1% to $83.82/bbl and $86.05/bbl, respectively.

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  (END) Dow Jones Newswires
  10-25-21 2315ET
  Copyright (c) 2021 Dow Jones & Company, Inc.

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