Indian Morning Briefing: Asian Markets Mixed; Focus on Pelosi Trip

GLOBAL MARKETS 
DJIA             32798.40    -46.73    -0.14% 
Nasdaq           12368.98    -21.71    -0.18% 
S&P 500           4118.63    -11.66    -0.28% 
FTSE 100          7413.42    -10.01    -0.13% 
Nikkei Stock     27552.91   -440.44    -1.57% 
Hang Seng        19616.44   -549.40    -2.72% 
Kospi             2435.66    -16.59    -0.68% 
SGX Nifty*       17305.00     -88.0    -0.51% 
*Aug contract 
 
USD/JPY    130.72-73    -0.67% 
Range      131.74   130.40 
EUR/USD    1.0268-71    +0.07% 
Range      1.0294   1.0257 
 
CBOT Wheat Sept $8.002 per bushel 
Spot Gold $1,776.30/oz  0.3% 
Nymex Crude (NY) $93.69 -$4.93 
 
 
US STOCKS 

US stocks closed slightly lower to start a new month of trading after finishing July with their best month since 2020.

The S&P 500 was down 0.3%, while the Dow Jones Industrial Average fell 0.1%. The technology-focused Nasdaq Composite Index lost 0.2%. Manufacturing activity grew at the slowest pace in two years last month, hurt by declines in new orders, the Institute for Supply Management reported, and the prices index fell sharply, suggesting inflation pressure eased

“The market’s beginning to price in the end of Fed tightening rather quickly, and I think it’s going to be disappointed. I think the market’s a bit ahead of itself here,” said Thomas H. MacCowatt, partner at Williams Jones Wealth Management.

 
 
ASIAN STOCKS 

Japan’s Nikkei Stock Average was down 0.9% at 27750.91 on broad losses and especially weighed by sharp falls in energy stocks, as concerns continue about the economic outlook. Earnings continued to be in focus. Mitsubishi UFJ Financial Group is set to report its results later in the day. Investors were also paying attention to House Speaker Nancy Pelosi’s trip to Asia and its geopolitical implications.

South Korea’s Kospi fell 0.3% to 2445.36 in early trade, dragged by losses in internet, gaming and energy stocks. Investors were booking profit after the benchmark gained for a sixth consecutive session, while parsing the latest economic data. The country’s inflation rate hit a near 24-year high in July, paving the way for further policy tightening later this month.

Hong Kong’s Hang Seng Index fell 2.3% to 19698.36 amid geopolitical tensions sparked by US House Speaker Pelosi’s planned visit to Taiwan despite warnings from China. Geopolitical tensions have intensified, which aren’t favorable to the local stock market, said KGI Research in its morning commentary. Investors were also worried about global recession risks, KGI Research added, noting the latest slowdown in China’s Caixin manufacturing PMI.

Chinese shares fell in early trade, dragged by miners and auto makers, amid rising geopolitical tensions as US House Speaker Nancy Pelosi visits Asia with a possible stop in Taiwan. The Shanghai Composite Index declined 1.5% to 3209.64, the Shenzhen Composite Index gave up 1.8% and the ChiNext Price Index was 0.7% lower.

FOREX 

JPY strengthened markedly against other G-10 and Asian currencies amid risk aversion triggered by US House Speaker Pelosi’s planned visit to Taiwan despite warnings from China. “Storm clouds are building over the Taiwan Strait,” said SPI Asset Management managing partner Stephen Innes in an email. While the Biden administration is trying to downplay the US-China tensions, Pelosi is almost certain to visit Taiwan and it is now on China’s side to see whether the situation escalates, Innes added. USD/JPY slipped 0.9% to 130.56, AUD/JPY fell 1.0% to 91.59 and SGD/JPY was down 0.8% at 94.82.

METALS 

Gold was steady in early Asia trading, but may strengthen on mild USD weakness. A weaker USD together with deteriorating economic data are great news for the precious metal, said Oanda’s senior market analyst Edward Moya in an email. However, technical levels matter and gold will likely need a fresh catalyst to breach the $1,800/oz level, Moya said. If USD’s pullback continues, this could be enough for gold’s rally to extend, he said. Spot gold was up 0.3% at $1,776.30/oz.

OIL SUMMARY 

Oil edged lower in the early morning Asian session, weighed by weak economic data out of China. On Monday, the Caixin China PMI fell to 50.4 in July from 51.7 in June, indicating that factory activity expanded at a slower pace. On Sunday, China’s official manufacturing PMI dropped to 49.0 in July from 50.2 in June, signaling that factory activity went back into contraction territory. The oil market was disturbed by the weakness in China’s economic data, said CBA strategist Tobin Gorey in a research report. This comes at a time when oil flows from OPEC+ appear to be strengthening, Gorey added. Front-month WTI crude oil futures were 0.1% lower at $93.83/bbl; front-month Brent crude was 0.1% lower at $99.95/bbl.

 
 
TOP HEADLINES 
U.S. Factory Growth Slowed in July on Decline in Orders 
Analysis: Beijing Bets the House on Infrastructure 
South Korea Inflation Hits Near 24-Year High in July 
Nancy Pelosi to Visit Taiwan Despite Warnings From China 
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Investors Fear Stock-Market Rally Will Be Short-Lived 
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Activision Blizzard Profit Slumps as Sales Shrink 
Pinterest Reports Lowest Revenue Growth in Two Years 
Einhorn Bets That Musk Will Be Forced to Buy Twitter 
Centerview Bankers Depart to Form Tech-Focused Deal-Advisory Boutique Tidal Partners 
Binance.US Delists Cryptocurrency Cited by SEC as a Security 
Ben & Jerry's Wants Unilever Back in Court Over Sale of Israeli Business 
Apollo-Led Group in Advanced Talks to Buy Atlas Air 
Trial Starts in Justice Department's Bid to Block Publishing Merger 
 
 

(END) Dow Jones Newswires

August 01, 2022 23:15 ET (03:15 GMT)

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

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