Asia Morning Call-Global Markets | Reuters

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** indicates closing price

All prices as of 18:15 GMT

EQUITIES

GLOBAL – Wall Street’s headache over the potential of a relatively fast pullback from stimulus by the U.S. Federal Reserve lingered Thursday morning as some stocks sold off again and government bond yields kept marching higher.

The Dow Jones Industrial Average (.DJI) fell 114.14 points, or 0.31%, to 36,292.97, the S&P 500 (.SPX) gained 7.21 points, or 0.15%, to 4,707.79 and the Nasdaq Composite (.IXIC) added 56.92 points, or 0.38%, to 15,157.09.

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NEW YORK – U.S. stock indexes swung between gains and losses on Thursday after minutes from the Federal Reserve’s last meeting struck a hawkish note, buoying cyclical sectors, while technology shares were mixed after suffering big losses this week.

At 12:30 p.m. ET, the Dow Jones Industrial Average (.DJI) was down 41.99 points, or 0.12%, at 36,365.12, the S&P 500 (.SPX) was up 11.66 points, or 0.25%, at 4,712.24, and the Nasdaq Composite (.IXIC) was up 40.87 points, or 0.27%, at 15,141.04.

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LONDON – European stocks tumbled from record highs on Thursday as hawkish signals from the minutes of the U.S. Federal Reserve’s December meeting battered technology shares with the prospect of rising interest rates.

The pan-European STOXX 600 index (.STOXX) closed 1.3% lower, erasing all gains made in a rally that pushed it to record highs in the first three sessions of the year.

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TOKYO – Japan’s Nikkei fell the most in six months on Thursday, as investors sold expensive growth stocks after hawkish U.S. Federal Reserve meeting minutes sparked a sell-off on Wall Street last night.

The Nikkei share average (.N225) closed 2.88% lower at 28,487.87, posting its biggest drop since June. The broader Topix (.TOPX) fell 2.07% to 1,997.01.

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SHANGHAI – China stocks closed lower on Thursday, tracking a global slump after minutes from the U.S. Federal Reserve’s December meeting pointed to a faster-than-expected rise in interest rates, while the surge in COVID-19 infections also weighed on sentiment.

The blue-chip CSI300 index (.CSI300) ended down 1% at 4,818.23, while the Shanghai Composite Index (.SSEC) lost 0.3% to 3,586.08 points.

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AUSTRALIA – Australian shares posted their biggest drop since September 2020 on Thursday, after the minutes of a U.S. Federal Reserve policy meeting signalled an earlier-than-anticipated rate hike, sharply hitting technology sector stocks.

The S&P/ASX 200 index (.AXJO) closed 2.7% down at 7,358.3, after plunging 3% earlier, with all sectors ending in the red. It had shed 0.3% on Wednesday.

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SEOUL – South Korean shares ended at a five-week low on Thursday, weighed down by elevated U.S. yields and a firmer dollar, as minutes of the Federal Reserve meeting signaled a sooner-than-expected start to rate hikes, dampening risk appetite.

The benchmark KOSPI (.KS11) closed down 33.44 points, or 1.13%, at 2,920.53, following a 1.18% decline on Wednesday.

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FOREIGN EXCHANGE

NEW YORK – The U.S. dollar edged up on Thursday after a sharp move in the prior session cutting declines following the minutes from the Federal Reserve’s December policy meeting raised expectations for an interest rate hike and after data on the labor market and trade balance.

The dollar index rose 0.096%.

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SHANGHAI – China’s yuan eased against the dollar on Thursday, dragged lower by investor worries over capital outflow risks and depreciation pressure after the Federal Reserve indicated it would tighten monetary policy at a faster pace than markets had expected.

In the spot market, the onshore yuan opened at 6.3711 per dollar and was changing hands at 6.3742 at midday, 95 pips weaker than the previous late session close.

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AUSTRALIA – The Australian and New Zealand dollars stepped back while bonds took a beating on Thursday as markets narrowed the odds on an early hike in U.S. interest rates and a faster pace of stimulus withdrawal.

The Aussie faded to $0.7210 , having again topped out at $0.7273 overnight. The currency has spent the past two weeks zigzagging between $0.7184 and $0.7276 and a clear break of either could unleash a large move.

The kiwi dollar eased to $0.6788 , after faltering at $0.6836 overnight. Major resistance still looms at $0.6855/57 with support around $0.6766.

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SEOUL – The Korean won weakened to its lowest level in around 17 months on Thursday, while the benchmark bond yield rose.

The won ended at 1,201.0 per dollar on the onshore settlement platform , its lowest close since July 24, 2020 and 0.34% lower than its previous close.

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TREASURIES

NEW YORK – U.S. Treasury yields advanced across the board on Thursday, as investors prepared for an earlier-than-expected rate hike and the possibility of the Federal Reserve cutting its bond holdings sooner than many initially thought.

Benchmark 10-year yields rose to 1.7530%, the highest since March 2021 and were up 3 basis points on the day at 1.7299%.

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LONDON – Germany’s 10-year bond yield lurched closer to positive territory on Thursday, just as borrowing costs across the euro area hit new highs in the face of a hawkish tone from the U.S. Federal Reserve and fresh signs of high German inflation.

Italy’s 10-year bond yield was 4 basis points higher on the day at 1.28% , having jumped to its highest level since July 2020 at almost 1.32%.

In Germany, the yield on 10-year Bunds, which rolled over into a new benchmark, rose to -0.031% , its highest level since May 2019, according to Refinitiv data.

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TOKYO – Japan’s benchmark 10-year government bond yields hit a nine-month high on Thursday, tracking elevated U.S. yields, after minutes from the U.S. Federal Reserve meeting signalled it may raise interest rates sooner than expected.

The 10-year JGB yield rose 1.5 basis points to 0.110%.

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COMMODITIES

GOLD

Gold prices slid to a one-week low on Thursday, pressured by rallying U.S. Treasury yields after the U.S. Federal Reserve signalled quicker increases to interest rates.

Spot gold was last down 1% at $1,790.80 an ounce by 12:49 ET (1749 GMT), its lowest since Dec. 29, while U.S. gold futures dropped 1.9% to $1,791.20.

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IRON ORE

Iron ore futures rose on Thursday, on expectations of a recovery in Chinese demand for the steelmaking raw material and steel products after the Beijing 2022 Olympics next month, while spot prices also remained well supported by restocking demand.

The most-active iron ore for May delivery on China’s Dalian Commodity Exchange ended daytime trading 4.1% higher at 717 yuan ($112.47) a tonne, near a session high of 717.50 yuan, its strongest since Oct. 27.

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BASE METALS

Industrial metals prices eased on Thursday after minutes from the U.S. Federal Reserve’s December meeting indicated that interest rates might rise quicker than expected, dampening risk appetite.

Benchmark copper on the London Metal Exchange (LME) was down 1.6% at $9,540 a tonne by 1715 GMT.

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OIL

Oil prices rose sharply on Thursday, extending a rally from the previous session, on escalating unrest in OPEC+ oil producer Kazakhstan and supply outages in Libya.

Global benchmark Brent crude futures rose $1.78, or 2.2%, to $82.58 a barrel by 1445 GMT, the highest since late November. U.S. West Texas Intermediate (WTI) crude futures gained $2.18, or 2.8%, to $80.03, the highest since mid-November.

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PALM OIL

Malaysian palm oil futures ended 1% lower on Thursday after rising for four days, though expectations for lower inventories and weak output limited losses.

The benchmark palm oil contract for March delivery on the Bursa Malaysia Derivatives Exchange ended down 53 ringgit, or 1.05%, at 4,983 ringgit ($1,183.33) a tonne.

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RUBBER

Japanese rubber futures slumped on Thursday, giving up the previous day’s gain as expectations of faster policy tightening by the U.S. Federal Reserve reduced risk appetite, while resurgent COVID-19 cases added to pressure.

Osaka Exchange’s rubber contract for June delivery , finished 5.8 yen, or 2.4%, down at 238.0 yen ($2.1) per kg.

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Bengaluru Bureau; +91 80 6749 1130

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