GLOBAL MARKETS DJIA 32813.23 -176.89 -0.54% Nasdaq 11994.46 -86.93 -0.72% S&P 500 4101.23 -30.92 -0.75% FTSE 100 7532.95 -74.71 -0.98% Nikkei Stock 27367.82 -90.07 -0.33% Hang Seng 20954.15 -340.79 -1.60% Kospi 2657.31 -28.59 -1.06% SGX Nifty* 16433.50 -74.5 -0.45% *June contract USD/JPY 130.12-13 -0.02% Range 130.25 129.89 EUR/USD 1.0646-49 -0.03% Range 1.0661 1.0646 CBOT Wheat July $10.412 per bushel Spot Gold 1845.26/oz -0.04% Nymex Crude (NY) $115.07 $0.40 US STOCKS
U.S. stock indexes were down slightly on the first day of June, after capping a volatile trading month.
The S&P 500 closed down 0.8%, with all three major U.S. indexes handing back morning gains. The Dow Jones Industrial Average lost about 0.5%, while the technology-focused Nasdaq Composite fell 0.7%.
The session ushers in a new trading month, but few investors expect a reprieve from the volatility that has dominated markets this year. Many traders remain worried about the pace of the Federal Reserve's interest-rate increases and whether they will plunge the U.S. economy into a recession. Eight of the last 11 extended Fed rate-rise cycles have eventually ended in recession, according to Deutsche Bank analysts.
Still, many traders say a recession isn't guaranteed, and any significant economic slowdown in the U.S. could be months away. That has led some investors to wade into the market and scoop up shares with beaten-down valuations, injecting more volatility into markets.
ASIAN STOCKS
Japanese stocks were lower in morning trade, dragged by falls in tech and electronics stocks as concerns continued about higher costs of borrowing and raw materials. Financial stocks were outperforming after U.S. Treasury yields rose overnight. Investors were focusing on government bond yields, the yen and crude-oil prices. The Nikkei Stock Average was down 0.6% at 27286.39.
South Korea's Kospi fell 0.9% to 2660.79 in early trade, tracking declines on Wall Street indexes overnight. Foreign and institutional investors were net sellers, as the U.S. Federal Reserve's quantitative tightening weighed on sentiment. Tech and transport stocks led the Kospi's retreat.
Hong Kong shares were lower in early trading as elevated U.S. Treasury yields and a stronger dollar weighed, analysts from KGI Securities said in a note. That said, losses may be limited amid Beijing's efforts to stabilize economic growth and Shanghai's relaxation of its Covid-19 curbs, which could lend support, the analysts said. The benchmark Hang Seng Index was down 1.4% at 20997.45. Declines were led by property-sector stocks.
Chinese stocks were mixed in morning trade, with losses among coal miners and home-appliance makers, but battery makers strengthened. The Shanghai Composite Index dropped 0.5% to 3167.26 and the Shenzhen Composite Index was down 0.2%, but the ChiNext Price Index rose 0.8%.
FOREX
Most Asian currencies weakened against the USD in the Asian morning session on prospects of aggressive Fed tightening spurred by strong U.S. economic data overnight. The ISM manufacturing report beat expectations and the Jobs Openings and Labor Turnover Survey, or Jolts, report reaffirmed the tightness of the U.S. labor market, with the solid data supporting the notion of a hawkish Fed, said NAB senior FX strategist Rodrigo Catril in a research report. The USD was broadly stronger on the boost to Fed rate-increase expectations, the strategist added. USD/KRW rose 0.4% to 1,252.20 and USD/TWD gained 0.3% to 29.32, while AUD/USD was down 0.2% at 0.7163.
METALS
Gold was little changed in early Asian trade, with U.S. interest-rate expectations and greenback strength in focus. Bullion prices could rise after falling from their late-April highs, Oanda senior market analyst Craig Erlam said in a note, adding that technical indicators --a rotation off the 50% Fibonacci retracement level of mid-May lows to late-May highs--may signal gold prices recovering and making a run at $1,900/oz. "But that may depend on how the broader markets behave and whether yields and the dollar avoid rising much further," Erlam said. Spot gold was down 0.04% at 1845.26/oz.
OIL SUMMARY
Oil was lower in early Asian trading ahead of an OPEC meeting later today, amid expectations that member states could increase output if Russia is exempt from the bloc's supply agreement, analysts from ANZ said in a note. SPI Asset Management managing partner Stephen Innes said there is room for production growth. "Saudi production has moved steadily upwards from 8.1mb/d in March 2021 to 10.3mb/d in April this year, according to OPEC's latest monthly report, but remains well below total theoretical capacity," he said. "Similarly, Kuwait, Iraq and the UAE have managed to raise production and are below theoretical capacity." Front-month Brent dropped 3.0% to $112.84/bbl; WTI shed 3.1% to $111.73/bbl.
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(END) Dow Jones Newswires
06-01-22 2315ET
