Dow Today – Asia Morning Call-Global Markets | Reuters

Jan 11 (Reuters) – —————————————————————————————-

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** indicates closing price

All prices as of 18:33 GMT

EQUITIES

GLO(BA)l – World stocks stumbled again on Monday while the 10-year Treasury yield hit a two-year high as bets that the U.S. Federal Reserve could raise interest rates as soon as March led investors to pare risky assets.

Monday’s drop follows a bruising first week of the year when a strong signal from the Fed that it would tighten policy faster to tackle inflation and then data showing a strong U.S. labor market, unnerved investors who had pushed equities to record highs over the holiday period.

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NEW YORK – Wall Street’s main indexes tumbled on Monday, as heavyweight technology stocks dropped on expectations of a sooner-than-expected rate hike that pushed U.S. Treasury yields to fresh two-year highs.

At 12:18 p.m. ET, the Dow Jones Industrial Average (.DJI) was down 457.01 points, or 1.26%, at 35,774.65, the S&P 500 (.SPX) was down 76.38 points, or 1.63%, at 4,600.65, and the Nasdaq Composite (.IXIC) was down 329.15 points, or 2.20%, at 14,606.75.

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LONDON – European shares posted their biggest one-day drop since late November on Monday as rising bond yields weighed on the heavyweight technology sector, while the rapid spread of the Omicron COVID-19 variant also dented sentiment.

The pan-European STOXX 600 (.STOXX) closed 1.5% lower, with technology stocks (.SX8P) tumbling 3.6% to a near three-month low. Losses were spread out across most European sectors.

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SHANGHAI – Chinese shares ended higher on Monday, lifted by gains in consumer and healthcare firms, while Shanghai’s tech-focussed STAR Market rebounded as investors latched on to expectations of deeper reforms and improved liquidity.

At the close, the Shanghai Composite index (.SSEC) was up 0.39% at 3,593.52.

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AUSTRALIA – Australian shares closed lower on Monday as an Omicron-led surge in COVID-19 infections pushed the country’s tally past one million cases, with a drop in local technology stocks ahead of a U.S. inflation report weighing further on markets.

The S&P/ASX 200 (.AXJO) ended 0.1% lower at 7,447.1, giving up some of Friday’s 1.3% gain.

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SEOUL – South Korean shares closed lower on Monday, dragged by expectations of faster-than-anticipated interest rate hikes by the U.S. Federal Reserve. The Korean won strengthened, while the benchmark bond yield rose.

The benchmark KOSPI (.KS11) ended 28.17 points, or 0.95%, lower at 2,926.72.

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FOREIGN EXCHANGE

NEW YORK – The dollar climbed against a basket of currencies on Monday as recent employment data prompted some Wall Street banks to raise their estimates for how quickly the U.S. Federal Reserve will raise interest rates this year.

The dollar index , which measures the greenback against six major peers, was up 0.4% at 96.15. The index remains close to the 16-month high touched late in November.

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SHANGHAI – China’s yuan firmed against the dollar on Monday, as corporate demand ahead of the Lunar New Year offset expectations of an early U.S. interest rate hike and worries over the first cases of the Omicron COVID-19 variant reported in the city of Tianjin.

In the spot market, the onshore yuan opened at 6.3740 per dollar and was changing hands at 6.3737 at midday, 33 pips firmer than the previous late session close.

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AUSTRALIA – The Australian and New Zealand dollars nudged higher on Monday as their U.S. counterpart took a step back, though the rapid spread of coronavirus in Australia was complicating the outlook for the economy and interest rates.

The Aussie stood at $0.7196 , having bounced from a two-week trough of $0.7130 on Friday. It faces resistance around $0.7200 and a major barrier at $0.7276 that has held for several weeks now.

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SEOUL – The won was quoted at 1,199.1 per dollar on the onshore settlement platform , 0.20% higher than its previous close at 1,201.5.

In offshore trading, the won was quoted at 1,197.0 per dollar, up 0.1%, while in non-deliverable forward trading, its one-month contract was quoted at 1,197.5.

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TREASURIES

NEW YORK – The benchmark U.S. 10-year Treasury yield rose to its highest level in nearly two years on Monday, as investors continue to anticipate the Federal Reserve will begin its tightening policy with an interest rate hike as soon as March.

The yield on 10-year Treasury notes was up 3.6 basis points to 1.805% after climbing to 1.808%, its highest since Jan 21, 2020.

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LONDON – Germany’s 10-year bond yield briefly touched its highest level since May 2019 on Monday, heading closer to 0% as surging inflation and expectations for U.S. Federal Reserve policy tightening kept global debt markets on edge.

On Monday, Germany’s 10-year yield briefly rose to -0.025%, the highest since May 2019, but was last flat at -0.034% by 1552 GMT.

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COMMODITIES

GOLD

Gold edged lower on Monday, weighed by a firmer dollar and elevated Treasury yields, as investors focused on key inflation data due later this week that could underpin faster rate hikes by the U.S. Federal Reserve.

Spot gold was last down 0.1% at $1,794.12 per ounce at 11:54 a.m. ET (1654 GMT), having hit a three-week low on Friday. U.S. gold futures fell 0.2% to $1,794.10.

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IRON ORE

Benchmark iron ore futures in China fell 2% on Monday, hit by concerns of disruptions to production and transportation in downstream sectors, after the country reported cases of the Omicron variant of the coronavirus over the weekend.

The most traded iron ore futures on the Dalian Commodity Exchange , for May delivery, dropped 2% to 700 yuan ($109.85) per tonne by close.

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(BA)SE METALS

Nickel prices held near their highest in more than two months on Monday, boosted by demand from the electric vehicle battery sector lowering stocks held in London Metal Exchange (LME) approved warehouses.

Benchmark nickel on the LME was up 0.3% at $20,790 a tonne at 1707 GMT having last week touched $21,165 a tonne, the highest since November 24.

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OIL

Oil prices were little changed on Monday as concerns over oil supply from Kazakhstan and Libya were offset by demand fears stoked by the rapid global rise in Omicron coronavirus infections.

Brent crude fell 11 cents, or 0.1%, to $81.64 a barrel at 1442 GMT while U.S. West Texas Intermediate (WTI) crude was down 13 cents, or 0.1%, at $78.77.

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PALM OIL

Malaysian palm oil futures recouped early losses to gain on Monday, lifted by a steeper-than-expected decline in December inventories and production, but a sharp plunge in January exports so far capped the gains.

The benchmark palm oil contract for March delivery on the Bursa Malaysia Derivatives Exchange ended up 41 ringgit, or 0.82%, at 5,034 ringgit ($1,199.14) a tonne, after hitting an intraday high of 2.6%.

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Bengaluru Bureau; +91 80 6749 1130

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