Asia Morning Call-Global Markets | Reuters

Jan 17 (Reuters) – —————————————————————————————-

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** indicates closing price

All prices as of 18:11 GMT

EQUITIES

GLOBAL – Global stock markets stumbled again on Friday and U.S. Treasury yields climbed as cautious investors worried about how imminent U.S. interest rate hikes would affect the economy.

By early evening, MSCI’s gauge of stocks across the globe (.MIWD00000PUS) had shed 0.36%. The pan-European STOXX 600 index (.STOXX) closed down 1.01% and had its worst week since Nov. 26, weighed in part by declines in technology stocks.

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NEW YORK – The Dow closed lower on Friday with a big drag from financial stocks as investors were disappointed by fourth quarter results from big U.S. banks, which cast a shadow over the earnings season kick-off.

The Dow Jones Industrial Average (.DJI) fell 201.81 points, or 0.56%, to 35,911.81, the S&P 500 (.SPX) gained 3.82 points, or 0.08%, to 4,662.85 and the Nasdaq Composite (.IXIC) added 86.94 points, or 0.59%, to 14,893.75.

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LONDON – European shares fell on Friday after hawkish remarks from central bank officials fanned worries over the impact of tighter policy, while’s France’s EDF slumped as the government intervened to curb electricity prices.

The pan-European STOXX 600 (.STOXX) shed 1.0%, while also marking its worst week since late November.

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TOKYO – Japan’s Nikkei index ended lower on Friday, tracking weak overnight finish on Wall Street, with technology heavyweights leading the losses, while concerns over the impact of the Omicron coronavirus variant also curbed risk appetite.

The Nikkei share average (.N225) ended 1.28% lower at 28,124.28, after falling more than 2% to a near four-week low. The broader Topix (.TOPX) lost 1.39% to 1,977.66.

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SHANGHAI – China stocks closed lower on Friday, as real estate sector woes continued to weigh on investor sentiment, while recent COVID-19 outbreaks in the country added to worries about the effect on the economy.

The blue-chip CSI300 index (.CSI300) fell 0.8%, to 4,726.73, while the Shanghai Composite Index (.SSEC) lost 1% to 3,521.26 points.

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AUSTRALIA – Australian shares dropped 1% on Friday, with tech and software firms leading broad losses, after their Wall Street peers succumbed to multiple U.S. Federal Reserve officials making hawkish remarks about interest rate hikes soon.

The S&P/ASX 200 index (.AXJO) ended 1.1% lower at 7,393.90. The benchmark rose 0.5% on Thursday. For the week, it fell 0.8%.

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SEOUL – South Korean shares posted their biggest drop in nearly four weeks on Friday, dragged down by tech stocks tracking an overnight slump on Nasdaq, while a rate hike by the country’s central bank dampened sentiment.

The benchmark KOSPI (.KS11) closed down 40.17 points, or 1.36%, at 2,921.92, marking its sharpest decline since Dec. 20.

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FOREIGN EXCHANGE

NEW YORK – The U.S. dollar snapped a three-day losing streak on Friday as the recent selling spree driven by the view that Federal Reserve tightening moves were largely priced in abated, and as weaker risk appetite in financial markets led investors to shun riskier currencies.

The U.S. dollar index was 0.3% higher at 95.157, but still looked set to finish the week down about 0.6%, its worst weekly showing since early September.

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SHANGHAI – China’s yuan extended gains on Friday and ended domestic trading session at a 3-1/2-year high against the dollar, underpinned by persistent seasonal corporate demand ahead of the long Lunar New Year holiday and resilient trade data.

The onshore yuan finished domestic trading session at 6.3435 per dollar, the strongest such close since May 14, 2018, compared with the previous late night close of 6.3602.

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AUSTRALIA – The Australian and New Zealand dollars were sitting on solid gains for the week on Friday after a pullback in their U.S. counterpart cracked some major chart levels and triggered short covering.

The Aussie had eased a touch to $0.7273 , but was still up 1.2% for the week having hit a two-month top of $0.7314 overnight. The break of resistance around $0.7276 brightened the technical outlook with a first bull target around $0.7342.

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SEOUL – The Korean won was flat on Friday, while the benchmark bond yield rose.

The won ended at 1,187.3 per dollar on the onshore settlement platform , flat from its previous close.

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TREASURIES

NEW YORK – Speculators’ net bearish bets on benchmark U.S. 10-year Treasury note futures swelled to their largest since February 2020, just before the onset of the pandemic, according to Commodity Futures Trading Commission data released on Friday.

Futures on U.S. 10-year notes showed net shorts of 349,839 contracts in the week ended Jan. 11, compared with 276,923 contracts the previous week.

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LONDON – Euro zone bond yields resumed their rise in choppy trading on Friday as central bank tightening remained the main investor focus, but sharp falls earlier this week set Germany’s benchmark 10-year yield for its biggest weekly fall in six weeks.

By 1600 GMT, Germany’s 10-year yield, which moves inversely with its price, was up around 3 basis points (bps) at -0.064% .

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TOKYO – Japan’s 10-year government bond yields hit a nearly one-year high, as investors became cautious about possible rate hikes by the country’s central bank.

The 10-year JGB yield rose 2.5 basis points (bps) to 0.150%, after touching 0.156% earlier, its highest since March 2021.

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COMMODITIES

GOLD

Gold prices slipped on Friday, weighed down by an uptick in Treasury yields on prospects of U.S. interest rate hikes and a stronger dollar.

Spot gold was down 0.3% at $1,816.22 per ounce by 13:56 ET (1856 GMT). U.S. gold futures settled down 0.3% at $1,816.50.

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IRON ORE

Chinese steelmaking raw materials dropped on Friday, with coking coal and coke futures diving around 4% and iron ore prices dipping about 3%, as the market is on the lookout for government policy towards steel output controls.

The most-traded coking coal futures on the Dalian Commodity Exchange , for May delivery, fell as much as 4.4% to 2,258 yuan ($355.06) per tonne. They were down 2.6% to 2,300 yuan at close.

Benchmark iron ore futures slipped 2.3% to 722 yuan per tonne, while spot 62% iron ore inched up $0.5 to $132.5 on Thursday, according to SteelHome consultancy.

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BASE METALS

Nickel prices surged to their highest since 2011 on Friday as a supply deficit ate into stockpiles and investors looked ahead to rising demand from electric vehicles.

Benchmark nickel on the London Metal Exchange (LME) was up 0.1% at $22,205 a tonne at 1718 GMT having earlier reached $22,935. It is up about 7% this week.

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OIL

Oil futures settled higher on Friday, boosted by supply constraints and worries of a Russian attack on neighbouring Ukraine, pushing prices toward their fourth weekly gain despite sources saying China is set to release crude reserves around the Lunar New Year.

Brent crude futures settled $1.59, or 1.9%, higher at a 2-1/2-month high of $86.06 a barrel, gaining 5.4% in the week.

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PALM OIL

Malaysian palm oil futures fell on Friday as traders locked in profits a day after the contract rose to an all-time high on concerns over labour shortages, but logged gains for a fourth straight week.

The benchmark palm oil contract for March delivery on the Bursa Malaysia Derivatives Exchange ended down 34 ringgit, or 0.66%, at 5,127 ringgit ($1,227.44) a tonne, while advancing 2.68% for the week.

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RUBBER

Japanese rubber futures rose for a third day on Friday as higher physical prices in Southeast Asia boosted sentiment and encouraged fresh buying while a firmer Shanghai market also lent support.

Osaka Exchange’s rubber contract for June delivery , finished 2.1 yen, or 0.9%, higher at 246.5 yen ($2.2) per kg, close to Thursday’s peak of 247.4 yen, its highest since Dec. 2.

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Bengaluru Bureau; +91 80 6749 1130

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