Tag: asian shares

Asian stocks hit 2-year low on rate hike worries

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Asian shares tumbled to their lowest in nearly two years on Tuesday as investors shed riskier assets on worries about higher interest rates and their impact on economic growth, while the dollar held near 20-year highs.

MSCI’s broadest index of Asia-Pacific shares outside Japan was down 0.8 percent, falling for a seventh straight session and extending declines to 17 percent so far this year.

Across Asia, share indexes were a sea of red. The Nikkei lost 0.9 percent, Australian shares shed 2.5 percent and Korean stocks lost 2 percent.

S&P 500 stock futures and Dow Jones futures both fell 0.5 percent and Nasdaq futures were down 0.6 percent.

“The idea of a benign and gentle tightening cycle has evaporated,” ANZ analysts said in a report.

“The reality is that the Fed cannot control the supply side of the economy in the short-run, so as long as key indicators like the labour force participation rate stay low and Chinese exports slow, the risk to inflation, and therefore interest rates, lies to the upside,” ANZ said.

Central banks in the United States, Britain and Australia raised interest rates last week and investors girded for more tightening as policymakers fight soaring inflation.

Overnight, US stocks extended Friday’s bruising sell-off as investors rushed to protect themselves against the prospect of a weakening economy.

Oil prices ticked lower on Tuesday on demand worries as coronavirus lockdowns in China, the top oil importer continued. Brent crude slipped 0.5 percent to $105.4 a barrel after falling 5.7 percent on Monday.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Asia shares edge up, sentiment fragile on China growth fears

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Asian shares were cautiously higher on Tuesday after a late revival on Wall Street, though global growth fears stoked by China’s stringent COVID-19 curbs and an expected streak of aggressive Federal Reserve tightening sapped risk appetite.

MSCI’s broadest index of Asia-Pacific shares outside Japan ticked up 0.8 percent, helped by China’s blue-chip index adding 0.33 percent, after its worst day in two years on Monday. Hong Kong’s benchmark Hang Seng Index also bounced 0.6 percent.

Yet sentiment remained fragile, after Twitter Inc shares rose on news that Elon Musk, the world’s richest person, clinked a deal to pay $44 billion cash for the social media platform populated by millions of users and global leaders.

The nervousness about China’s economic slowdown hit Australian shares in early trade, with the local benchmark down 1.78 percent, hurt particularly by declines in miners.

Japan’s Nikkei stock index rose 0.57 percent. US stock futures were little changed in Asia trade.

The stringent lockdown in China, and its proliferation as cases spread to other big cities like Beijing, is weighing on the economic growth outlook and investment sentiment, said Manishi Raychaudhuri, Asia-Pacific equity strategist at BNP Paribas.

“If the lockdown situation persists for longer,” it impact China’s economy significantly and “also have an impact on the supply chains across the world,” he said.

On top of the China lockdown worries, markets have also been fretting that an aggressive pace of Fed tightening could derail the global economy, which has only just started to recover from the COVID-19 pandemic hit.

The Fed is expected to raise rates by half a percentage point at each of its next two meetings.

Lockdown in China’s financial hub Shanghai has dragged into a fourth week, as authorities stick to their “dynamic zero-Covid” policy to combat the latest outbreak of Omicron cases.

In currency markets, the dollar was in fine fettle on safe-haven demand. China’s offshore yuan was steadier in early trading, at 6.5564 per dollar after the People’s Bank of China said late on Monday it would cut the amount of foreign exchange banks must hold as reserves.

That helped it recover from a year-low of 6.609 per dollar on Monday, hurt by fears about China’s economic growth.

The dollar was higher against most peers, with its index against a basket of rivals at 101.58, just off its overnight two-year peak.

Benchmark US 10-year yields were steady at 2.8121 percent in morning deals. Treasury yields retreated on Monday from hawkish Fed-induced highs, as the China lockdown and growth fears sent investors to the safety of US bonds.

The same worries jolted the oil market on Monday, slicing about 4 percent of its value to its lowest in two weeks. In early trade in Asia, US crude steadied a bit, up 0.05 percent at $98.59 per barrel and Brent was at $102.42, up 0.1 percent.

Spot gold added 0.3 percent to $1,902.91 an ounce.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Asian stocks record a sink, rates and recession continue to worry investors

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Asian stocks fell the most in two weeks on Monday as concern about rapid US rate rises and slowing growth rattled investors, while the euro found support after Emmanuel Macron won a second term as French president.

MSCI’s broadest index of Asia-Pacific shares outside Japan slid 1.6 percent to a six-week low, and a nudge from authorities extended steep losses for the Chinese yuan. [CNY/]

Japan’s Nikkei fell 1.9 percent. Hong Kong’s Hang Seng fell 3 percent. S&P 500 futures dropped 0.8 percent while FTSE futures and European futures were off by more than 1 percent. Oil fell 2.7 percent. [O/R]

The euro was broadly steady at $1.0802, compared with broad dollar gains elsewhere, and it touched an almost two-month high against a struggling sterling.

Macron comfortably saw off a far-right challenge, reassuring markets about France’s commitment to an integrated Europe, even if his economic platform now depends on parliamentary elections in June.

“The absence of a change of course will reassure not only the other European Union countries but also the NATO,” said Vincent Mortier, chief investment officer of Amundi, Europe’s largest fund manager.

The news was small relief, though, for broader worry about a global backdrop of high inflation and likely rate rises that have been pounding bond markets for months – exacerbated by war in Ukraine and disruption from coronavirus-related lockdowns in China.

US shares had tumbled at the end of last week after Federal Reserve Chairman Jerome Powell said a 50-basis-point rate hike was on the table at May’s meeting and St. Louis Fed President James Bullard floated the idea of 75 bp hikes.

“Concerns around rates and recession are now the biggest risks for investors” with a particular focus on demand, said Candace Browning, head of global research at Bank of America.

“Spiking food and gasoline prices plus the end of key stimulus programs has investors concerned about the low-income consumer’s ability to spend.” The Treasury market steadied, keeping the benchmark 10-year yield at 2.8581 percent and the two-year yield off last week’s highs at 2.6399 percent.

Also Read: Stock Market LIVE Updates: Sensex, Nifty50 likely to make a gap-down start today, SGX Nifty futures drop 200 pts

YUAN SLIDES

Harsh restrictions in China have also begun to spread to Beijing, where more than a dozen buildings have been locked down, as concern grows about the economic damage of the shutdown of Shanghai.

China’s blue-chip CSI 300 index fell to its lowest since June 2020 and investors have so far been underwhelmed by policy support for the flagging economy.

The middle of China’s onshore currency trading band was fixed at its lowest level in eight months on Monday, seen as an official nod for the yuan’s recent slide and it was quickly sold to a one-year low of 6.5225 per dollar.

The dollar was also on the march elsewhere though trade was thinned a bit by public holidays in Australia and New Zealand. The Aussie slid 0.8 percent to a six-week low of $0.7185 and the kiwi fell 0.4 percent to a two-month low of $0.6603.

Sterling, buffeted by weak retail sales figures last week, slipped 0.3 percent to an 18-month low of $1.2792. [GBP/] Brent crude futures dropped 2.7 percent to a two-week low of $103.88 a barrel. U.S. crude futures fell 2.6 percent to $99.38 a barrel. Copper and iron ore fell in Asia, though soybean oil jumped after an Indonesian ban on palm oil export.

The week ahead is headlined by U.S. growth data due on Thursday, European inflation figures due on Friday and a monetary policy meeting for the Bank of Japan.

Investors expect U.S. growth to steady around 1.1 percent, far slower than the COVID-19 rebound-juiced figures of the recent past, but probably robust enough to bear rate rises.

The BOJ meeting will also be closely watched for any adjustments to economic projections or any signs of a policy response to the yen, which has tumbled more than 10 percent in two months.

Bitcoin held on just above resistance at $40,000.

Also Read: US stocks tumble amid surging dollar as Fed’s May meet rate hike take spotlight

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Opening Bell: RIL and Tata Motors help Nifty reclaim 17,000

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Indian equity benchmark indices opened on a positive note on Wednesday amid mixed global cues. The International Monetary Fund (IMF) lowered India’s GDP growth prediction for FY23 from 9 percent to 8.2 percent, citing increased commodity prices as a factor weighing on private consumption and investment.

At 09:16 am, the Sensex was up 213.80 points or 0.38 percent at 56,676.95, and the Nifty was up 57.00 points or 0.34 percent at 17,015.70. About 1458 shares have advanced, 512 shares declined, and 83 shares are unchanged.

Coal India, Eicher Motors, Tata Motors, Maruti Suzuki and Reliance Industries were among the major gainers on the Nifty.

Kotak Mahindra Bank, Apollo Hospitals, Cipla, HUL and HDFC Life were among the major laggards.

Tata Elxsi, Angel One, and ICICI Securities are among those slated to release their Q4 earnings today.

Telecom stocks will also be in focus after Reliance Jio and Vodafone Idea reported month on month decline in wireless subscribers while Airtel showed gains in February.

Global Markets

Oil and stock markets were under pressure on Wednesday on worries about the fallout from China’s pandemic lockdowns, while the yen slightly extended its record losing streak as traders put Japan’s ultra-easy monetary policy settings to the test.

The Chinese yuan hit its lowest since October after the central bank promised support for the services sector, but was volatile as China also surprised and disappointed equities investors by not cutting lending rates.

MSCI’s broadest index of Asia-Pacific shares outside Japan was steady as modest losses in Hong Kong and Shanghai offset gains in Sydney. Japan’s Nikkei trimmed early gains to stand 0.5 percent higher by mid-morning.

S&P 500 futures fell 0.4 percent and Nasdaq futures dropped 0.9 percent.

Catch all the live market updates with CNBC-TV18’s blog

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Asian stocks in defensive mood on China and rate worries

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Asian shares traded cautiously on Tuesday, with investors weighing China’s measures to cushion an economic slowdown and the prospect of aggressive Federal Reserve monetary policy tightening.

Investors are also bracing for a barrage of earnings that will help them assess the impact of the Ukraine war and a spike in inflation on company financials. Netflix, Tesla and Johnson & Johnson are all to report this week.

Moscow has refocused its ground offensive in Ukraine’s two eastern provinces but Ukrainian President Volodymyr Zelenskyy has vowed to fight on.

Early in the Asian trading day, MSCI’s broadest index of Asia-Pacific shares outside Japan was down 0.5 percent while US stock futures, the S&P 500 e-minis, were up 0.2 percent.

Australia’s S&P/ASX 200 edged up 0.66 percent, as strong commodity prices lifted mining and energy stocks, while Japan’s Nikkei rose 0.18 percent.

China’s blue-chip CSI300 index was 0.06 percent higher in early trade while the Shanghai Composite Index rose 0.24 percent. Hong Kong’s Hang Seng index opened down 2.4 percent, pressured by a slump in tech giants listed in the city amid China’s latest regulatory crackdown on the sector.

The People’s Bank of China (PBOC) said on Friday it would cut the reserve requirement for all banks by 25 basis points (bps), releasing about 530 billion yuan ($83.25 billion) in long-term liquidity to cushion a slowdown.

Investors, however, felt the smaller-than-expected cut might not be enough to reverse a sharp slowdown in the world’s No. 2 economy that could significantly affect global growth.

China’s gross domestic product (GDP) on Monday beat analysts’ expectations with a 4.8 percent increase in the first quarter from a year earlier, while data on March activity showed weakness in consumption, property and exports affected by COVID-19 curbs.

Analysts said the key question was whether authorities would make adjustments to the tough anti-COVID-19 measures.

“We expect more policy support, mainly in the form of more infrastructure investment, stronger credit growth, and easier property policy. But we do not see the government undertake ‘whatever it takes’ to achieve the 5.5 percent growth target, nor shift the Covid policy soon,” said Wang Tao, Head of Asia Economics and Chief China Economist of UBS Investment Bank Research.

Wall Street ended the day lower in a choppy trading day on Monday, as investors contrasted Bank of America’s positive quarterly earnings with surging bond yields ahead of further earnings cues this week.

A significant cut to global growth expectations from the World Bank, paired with March weakness in China’s latest economic numbers injected some pessimism into US markets, which opened on Monday following a holiday-shortened previous week.

The Dow Jones Industrial Average ended down 0.11 percent, while the S&P 500 dipped 0.02 percent and the Nasdaq Composite slid 0.14 percent.

Markets were closed on Monday in Australia, Hong Kong and many parts of Europe for the Easter holiday.

The benchmark 10-year Treasury yield was last at 2.845 percent, after previously hitting 2.884 percent earlier on Monday, the highest since December 2018, as investors adjusted for the Federal Reserve to raise rates by 50 basis points at its May and June meetings to contain rapid inflation.

The two-year yield, which rises with traders’ expectations of higher Fed fund rates, touched 2.4459 percent compared with a US close of 2.46 percent.

The dollar index, a gauge of the greenback’s value against six major currencies, was up at 100.88 after surging to 100.86 on Monday, the highest since April 2020.

Oil prices were slightly lower on Tuesday, after having been boosted by concerns over tight global supply amid the Ukraine crisis in the previous sessions.

US crude dipped 0.57 percent to $107.59 a barrel. Brent crude fell to $112.7 per barrel.

Gold prices steadied on Tuesday, after getting within a stone’s throw of the key $2,000 per ounce level in the previous session.

Spot gold traded at $1,977.18 per ounce.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Asian shares track Wall Street higher as US yields stabilise

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Asian shares tracked Wall Street higher on Thursday, while US Treasury yields steadied and dollar retreated, as latest US data raised hopes that inflation may be close to peaking, though several major central banks raised rates aggressively.

Traders were waiting for a European Central Bank meeting later in the day, to see if it was as hawkish as others have been.

MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.4 percent in early Asian trading, buoyed by a 0.5 percent gain in Australia’s resource-heavy shares and a 0.6 percent advance in mainland China’s bluechip stocks. Japan’s Nikkei was up 1.2 percent.

South Korean shares were an outlier on Thursday. The KOSPI index fell 0.4 percent as the central bank raised its policy rate to the highest since August 2019 in an unexpected move as it seeks to quell surging inflation.

Asian markets including Hong Kong, Singapore and Australia are on holiday on Friday for Easter, as are major European and US markets.

“I think there are a couple of recent positive developments that could be boosting Asian shares today. Firstly, US core consumer prices moderated — which could mean inflation pressures may start to abate soon in the US, and secondly, Chinese policymakers recently came out with more encouraging remarks about stabilising and supporting economic growth,” said David Chao, Hong Kong-based global market strategist at Invesco.

“I’ve argued that an upswing in money supply and credit growth could provide a floor for Chinese equities and signal that investor sentiment may soon start to improve, especially if COVID and geopolitical concerns start to wane.”

China’s cabinet on Wednesday flagged upcoming cuts to banks’ reserve requirement ratios (RRR) to support an economy battered by COVID-19 lockdowns.

Yields on US Treasuries steadied in early Asian trade. The yield on 10-year Treasury notes was at 2.7120 percent, compared to an over three-year peak of 2.836 percent, before the US data released on Tuesday showed inflation running less high than investors had feared.

The two-year yield was 2.3727 percent, compared with a close of 2.3645 percent the previous day.

Retreating US yields offered some relief to the bruised yen on Thursday, after it weakened past the 126 yen per dollar mark in the previous session.

The prospect of fast and aggressive US interest rate hikes and growing market expectations that the Bank of Japan will keep rates ultra-low in the near term have weakened the yen.

The euro rose 0.2 percent against the dollar, although it was not too far away from its 1-month low on concerns about Ukraine.

Equity markets have suffered from central banks’ hawkishness, but Wall Street on Wednesday rallied to end sharply higher, powered by a recovery in interest-sensitive growth stocks. The Nasdaq jumped over 2 percent while the S&P 500 and the Dow gained more than 1 percent.

Investors in US stocks appear to begun buying into “the prediction that inflation is peaking” and are showing optimism that all the bad news could already be priced in, said Hebe Chen, market analyst at IG, said in a note on Thursday.

New Zealand’s central bank raised interest rates by a hefty 50 basis points on Wednesday, the biggest hike in over two decades, while the Bank of Canada also raised rates by 50 bps on Wednesday, making its biggest single move in more than two decades and flagging more hikes to come.

Geopolitical risks could again cap market optimism. Ukraine warned on Wednesday that Russia was ramping up efforts in the South and East as it seeks full control of Mariupol, while Western governments committed more military help to bolster Kyiv.

Oil futures were down slightly on Thursday morning, after rising sharply in the first half of the week, as traders weighed a larger-than-expected build in US oil stocks against tightening global supply.

US crude dipped 0.64 percent to $103.58 a barrel. Brent crude fell to $108.25 per barrel.

Gold was slightly lower. Spot gold was traded at $1975.21 per ounce.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Asia stocks wobble, Nikkei fall 1.5%; dollar firm as markets wary before key US inflation data

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Asian shares were down while the US dollar held strong on Tuesday, as Treasury yields spiked to a three year high ahead of US inflation data which could foreshadow even more aggressive interest rate hikes from the Federal Reserve.

MSCI’s broadest index of Asia-Pacific shares outside Japan was down 0.3 percent, after US stocks ended the previous session with mild losses.

Australian shares were down 0.65 percent, while Japan’s Nikkei stock index slid 1.5 percent.

Higher US bond yields were supporting the dollar, with the US currency’s index measure against six peers moving back over 100 to test last week’s near-two-year high.

The Japanese currency bore the brunt of the losses against the greenback, which rose to 125.77 yen overnight, its highest since June 2015.

The yen has been under the gun over recent months as the Bank of Japan has committed to ultra-easy policy even as many other major central banks, led by the Fed, have embarked on tightening monetary conditions.

The euro was buffeted by politics, unable to hold onto gains from its mini-relief rally on Monday after French leader Emmanuel Macron beat far-right challenger Marine Le Pen in the first round of presidential voting.

It was last steady at $1.087.

“US stocks fell on Monday as investors grew increasingly concerned a three-year high in the benchmark US 10-year Treasury yield would start to slow the economy, and looked ahead to the upcoming earnings season for signs of what impact inflation is having on corporate profits,” Ord Minnett research analysts wrote to clients on Tuesday.

China’s markets gained ground as signs emerged that some of the strict restrictions were starting to ease across the country’s financial capital.

World markets have been hit hard in the past few months on worries the Ukraine war, Fed’s tightening and China’s tough new COVID-19 restrictions could set back global growth.

Hong Kong’s Hang Seng Index gained 0.6 percent in early trade on Tuesday, while China’s bluechip CSI300 Index was up 0.4 percent.

Tech stocks weighed on Wall Street during Monday’s session as the Dow Jones Industrial Average (.DJI) fell 1.19 percent, the S&P 500 (.SPX) lost 1.69 percent and the Nasdaq Composite (.IXIC) dropped 2.18 percent. All 11 S&P 500 sectors fell.

Economists polled by Reuters forecast the US consumer price index (CPI) on Tuesday would post an 8.4 percent year-over-year increase in March.

NatWest Markets economists have forecast a 1.1 percent month-on-month jump in the headline inflation figure which would be the largest monthly gain since June 2008.

“We’re quite hawkish in terms of US rate hikes and we think it’s not just the amount of tightening but the pace which is going to impact investors,” Elizabeth Tian, Citigroup’s equity derivatives director in Sydney told Reuters.

Equities markets have been very resilient and quite relaxed compared to the fixed income markets but we’re expecting at the Fed’s May meeting there will be some kind of announcement in terms of quantitative easing tapering and that is when we could see the volatility emerging in the equities.

“The question is going to be how do markets react to the velocity of rate hikes we could see.”

Early in the Asian session, the yield on benchmark 10-year Treasury notes rose to 2.8107 percent compared with its US close of 2.782 percent on Monday.

The two-year yield, which rises with traders’ expectations of higher Fed fund rates, touched 2.5242 percent compared with a US close of 2.508 percent.

US crude ticked up 0.85 percent to $95.09 a barrel. Brent crude rose to $99.18 per barrel.

Gold was slightly lower. Spot gold was traded at $1951.45 per ounce.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Opening Bell: Sensex, Nifty open with cuts tracking weak Asian markets; oil prices on retreat

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Indian equity benchmark indices on Monday opened the truncated week on a negative note with the Nifty below 17,750 amid weak global cues.

At 09:16 am, the Sensex was down 202.91 points or 0.34 percent at 59,244.27, and the Nifty was down 46.10 points or 0.26 percent at 17,738.20. About 1,730 shares have advanced, 584 shares declined, and 141 shares are unchanged.

Infosys, Kotak Bank, HDFC twins, Reliance, Axis Bank and M&M were the top laggards on the Sensex, while Ultratech Cement, Tech Mahindra, Maruti, PowerGrid, Sun Pharma were the top gainers.

SBI Life Insurance was the additional loser on the Nifty, while gainers were Tata Motors, Grasim Industries, Cipla and NTPC were additional gainers.

The broader markets, meanwhile, opened in green. The BSE MidCap and SmallCap indices were up to 0.6 percent higher while India Vix shot up nearly 7 percent.

Among sectoral indices, Nifty IT was down 1 percent while Nifty Bank, Financials, Auto and FMCG were the other losers. Meanwhile, Nifty Metals, Pharma, PSBs, and Oil & Gas indices gained.

Coaching services provider Veranda Learning Solutions’ shares are set to debut on stock exchanges BSE and NSE today. Veranda is among the few companies to hit the primary market so far in 2022, following a bumper year that saw most of 63 companies receive a robust response to their IPOs by investors.

Tata Consultancy Services, Birla Tyres, Delta Corp, Elnet Technologies, Kesoram Industries, and Lasa Supergenerics will release their quarterly earnings on April 11.

Global Markets

US benchmarks finished a choppy session on a mixed note on Friday as investors assessed the economic outlook with the Fed moving to fight inflation. S&P 500 was down 0.3 percent while the Nasdaq Composite was down 1.3 percent. Dow Jones was up 0.4 percent.

Equities in other Asian markets begin the day in the red, as investors awaited central bank meetings lined up during the course of the week. MSCI’s broadest index of Asia Pacific shares outside Japan was down 1.3 percent in the early hours.

Catch all the live market updates with CNBC-TV18’s blog here:

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Asia wary ahead of ECB meeting, US inflation data

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Asian shares slipped on Monday ahead of a week thronging with central bank meetings and US inflation data, while the euro eked out a gain on relief the far right did not win the first round of the French presidential elections.

French leader Emmanuel Macron and challenger Marine Le Pen qualified on Sunday for what promises to be a tightly fought presidential election runoff on April 24.

A Le Pen victory would be a similar jolt as Britain’s Brexit vote to leave the European Union (EU). The result was close enough to leave the euro just a tick firmer at $1.0888, after an initial pop-up to $1.0950.

The mood in equity markets was cautious, with MSCI’s broadest index of Asia-Pacific shares outside Japan easing 0.1 percent. Japan’s Nikkei dropped 0.6 percent, having shed 2.6 percent last week.

S&P 500 stock futures and Nasdaq futures both dipped 0.2 percent in early trade. Earnings season kicks off this week with JP Morgan, Wells Fargo, Citi, Goldman Sachs and Morgan Stanley all due to report.

Wall Street, so far, has fared surprisingly well in the face of a vicious selloff in bonds which saw 10-year Treasury yields surge 31 basis points last week to be last at 2.72 percent.

Markets have raced to price in the risk of ever-larger rate hikes from the Federal Reserve with futures implying rises of 50 basis points at both the May and June meetings.

BofA’s US economist Ethan Harris now expects half-point hikes at each of the next three meetings and a cycle peak around 3.25-3.50 percent.

“If inflation looks like it is heading below 3 percent, then our current call should be hawkish enough,” Harris said in a note. “Conversely, if inflation gets stuck above 3 percent then the Fed will need to hike until growth drops close to zero, risking a recession.”

All of which underlines the importance of the March US consumer price report on Tuesday where the median forecast is for a stratospheric rise of 1.2 percent, taking annual inflation to an eye-watering 8.5 percent.

Inflation will also be front and centre for the European Central Bank meeting on Thursday where the risk is for a hawkish slant to the statement.

“Inflation has jumped well above where the ECB thought it would be just one month ago,” noted analysts at TD Securities. “We expect a dramatic shift from the ECB, with the announcement of an early end to QE in May and setting the groundwork, but not quite committing to a June hike.”

Continuing the tightening theme, central banks in Canada and New Zealand could well raise rates by 50 basis points at their policy meetings this week.

The outsized rise in Treasury yields has seen the dollar index top 100 for the first time since May 2020, and it was the last trading at 99.785.

The main casualty has been the yen as the Bank of Japan remains dedicated to keeping its policy super-loose and bond yields near zero. The dollar was up at 124.37 yen, having gained 1.5 percent last week to just below its recent peak of 125.10.

In commodity markets, thermal coal was the stand-out winner last week with a rise of almost 13 percent after the EU banned imports of Russian coal.

Gold managed a weekly gain of 1.1 percent but has been undermined by the huge rise in bond yields and was last flat at $1,944 an ounce.

Oil prices remained under pressure after world consumers announced plans to release crude from strategic stocks and as Chinese lockdowns continued.

Early Monday, Brent was down $1.51 at $101.27, while US crude lost $1.48 cents to $96.78.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow