Asia Morning Call-Global Markets | Reuters

Jan 24 (Reuters) – —————————————————————————————-

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** indicates closing price

All prices as of 18:19 GMT

EQUITIES

GLOBAL – Risk aversion dominated markets on Friday as stocks slumped on Wall Street and in Europe, oil prices fell from seven-year highs earlier in the week and bond prices surged with traders scurrying for the relative safety of government debt.

In Europe, the German, French and Italian indices fell almost 2%, with the broad Euro STOXX index (.STOXX) of 600 leading regional companies closing down 1.84%. MSCI’s all-country world index (.MIWD00000PUS) fell 1.74%.

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NEW YORK – Wall Street’s main indexes ended sharply lower on Friday as Netflix shares plunged after a weak earnings report, capping a brutal week for stocks that saw the S&P 500 and Nasdaq log their biggest weekly percentage drops since the onset of the pandemic in March 2020.

Netflix shares tumbled 21.8%, weighing on the S&P 500 and the Nasdaq, after the streaming giant forecast weak subscriber growth. Shares of competitor Walt Disney (DIS.N) fell 6.9%, dragging on the Dow, while Roku (ROKU.O) also slid 9.1%.

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LONDON – European stocks slumped on Friday to mark a third week of losses as jitters over monetary policy tightening by central banks this year and weak economic data sparked steep declines across global equities.

The pan-European STOXX 600 (.STOXX) dropped 1.8%, and was down 1.4% over the week. Mining stocks (.SXPP) were the day’s worst performers, losing 3.3%.

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TOKYO – Japanese shares fell on Friday, hit by losses in technology heavyweights after the Nasdaq dropped 1% overnight as fears of inflation and higher interest rates dented risk appetite.

The Nikkei share average (.N225) closed 0.9% lower at 27,522.26, after losing more than 2% earlier in the session. The broader Topix (.TOPX) lost 0.59% to 1,927.18.

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SHANGHAI – Chinese shares fell on Friday as technology firms slid following a watchdog’s fresh vow to crack down on corruption among internet platforms, while a U.N.-backed deal to produce cheap versions of a COVID-19 pill weighed on healthcare firms.

At the close, the Shanghai Composite index (.SSEC) was down 0.91% at 3,522.57.

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AUSTRALIA – Australian shares skidded on Friday to wrap up their worst week in more than a year, weighed down by miners as Whitehaven Coal slumped after cutting its 2022 forecast and Rio Tinto fell after Serbia revoked its lithium exploration licences.

The resources-heavy S&P/ASX200 (.AXJO) closed 2.3% lower at 7,175.80, after hitting its lowest since Sept. 29 earlier in the session. It fell 3% this week, its biggest since late October 2020.

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SEOUL – South Korean shares ended at a more than one-year low on Friday, as tech stocks tracked an overnight rout on Nasdaq, while investor sentiment was pressured by fears of inflation and aggressive policy tightening by the U.S. Federal Reserve.

The benchmark KOSPI (.KS11) closed down 28.39 points, or 0.99%, at 2,834.29, their lowest since Dec. 29, 2020 and marking the sixth session of decline in seven.

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FOREIGN EXCHANGE

NEW YORK – The dollar declined on Friday, along with U.S. Treasury yields, while investors looked ahead to next week’s Federal Reserve meeting for more clarity on the outlook for rate hikes.

The U.S. dollar index was set for biggest weekly percentage gain since mid-December.

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SHANGHAI – China’s yuan slipped against the dollar on Friday as market participants locked in profits and refrained from testing highs in the Chinese currency.

In the spot market, the onshore yuan opened at 6.3460 per dollar and was changing hands at 6.3427 at midday, 12 pips weaker than the previous late session close.

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AUSTRALIA – The Australian and New Zealand dollars lost ground on Friday as a slide in global stock markets undermined risk assets, but gave bonds a reprieve from recent selling.

The Aussie lapsed to $0.7184 , having been as high as $0.7275 on Thursday, and was down 0.5% on the week.

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SEOUL – Both the Korean won and the benchmark bond yield fell.

The won ended at 1,194.0 per dollar on the onshore settlement platform , 0.13% lower than its previous close.

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TREASURIES

NEW YORK – U.S. Treasury yields fell on Friday as stock market declines reflected poor risk appetite and as concerns about potential conflict in Ukraine increased demand for the safe haven debt.

Benchmark 10-year note yields were last at 1.746%, after earlier getting as low as 1.733%.

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LONDON – Euro zone government bond yields fell on Friday amid mixed signals from the European Central Bank and increased demand for safe-haven assets as geopolitical worries over Ukraine mounted while equity markets fell.

Italian government bond yields fell 3 bps to 1.34%, with the spread between Italian and German 10-year yields at 141 basis points. ,

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TOKYO – Japanese government bond (JGB) yields fell on Friday after U.S. Treasury yields steadied, with weak equities and moderately solid outcome of a government auction supporting sentiment.

The 10-year JGB yield fell one basis point to 0.130% and the 20-year JGB yield fell one basis point to 0.525%.

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COMMODITIES

GOLD

Gold was set to gain for a second week as inflation and geopolitical risks lifted its safe-haven appeal but it slipped on Friday amid a broader decline in commodities, while palladium was on course for its best week since November 2020.

Spot gold was down 0.4% at $1,831.60 per ounce as of 13:43 ET (1843 GMT). U.S. gold futures settled down 0.6% at $1,831.80.

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IRON ORE

Chinese iron ore futures surged around 3% on Friday, posting a third straight weekly gain amid hopes for strong demand, fuelled by Beijing’s fresh stimulus measures, while steel prices were range-bound as production curbs at mills weighed.

Benchmark iron ore futures on the Dalian Commodity Exchange , for May delivery, jumped as much as 3% to 762 yuan ($120.12) per tonne, the highest since Oct. 13.

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BASE METALS

Copper prices wilted on Friday as risk-off sentiment swept financial markets and investors took the opportunity to lock in profits after two days of rallying prices.

Three-month copper on the London Metal Exchange had shed 0.5% to $9,937 a tonne by 1730 GMT, retreating below the $10,000 a tonne mark.

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OIL

Oil prices slid for a second day in a row on Friday, pressured by an unexpected rise in U.S. crude and fuel inventories while investors took profits after the benchmarks touched seven-year highs earlier in the week.

Brent futures fell 49 cents, or 0.6%, to settle at $87.89 a barrel, while U.S. West Texas Intermediate (WTI) crude fell 41 cents, or 0.5%, to settle at $85.14.

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PALM OIL

Malaysian palm oil futures ended at a record high on Friday, notching their fifth straight weekly gain, driven by estimates of lower output in January and Indonesia’s plans to limit exports of the commodity.

The benchmark palm oil contract for April delivery on the Bursa Malaysia Derivatives Exchange closed up 136 ringgit, or 2.62% to 5,323 ringgit ($1,271.92) a tonne.

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RUBBER

Japanese rubber futures fell on Friday as weaker oil prices and Asian equities dented risk appetite, prompting fresh selling, while concerns over slow automobile output due to the spreading pandemic also weighed on sentiment.

The Osaka Exchange rubber contract for June delivery , finished 6.1 yen, or 2.4%, lower at 244.4 yen ($2.2) per kg.

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Bengaluru Bureau; +91 80 6749 1130

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