GLOBAL MARKETS DJIA 32661.84 5.14 0.02% Nasdaq 11379.48 -76.06 -0.66% S&P 500 3951.39 -18.76 -0.47% FTSE 100 7914.93 38.65 0.49% Nikkei Stock 27480.32 -36.21 -0.13% Hang Seng 20453.57 -166.14 -0.81% Kospi 2425.55 12.70 0.53% SGX Nifty* 17468.00 -51.5 -0.29% *March contract USD/JPY 136.33-34 +0.10% Range 136.45 136.02 EUR/USD 1.0648-51 -0.20% Range 1.0676 1.0647 CBOT Wheat March $6.970 per bushel Spot Gold $1,837.31/oz 0.1% Nymex Crude (NY) $77.74 $0.69 U.S. STOCKS
Stronger-than-expected manufacturing data Wednesday pushed the market lower and lifted the 10-year Treasury yield to a level rarely seen in recent years, as investors weigh signs of persistent inflation.
The S&P 500 fell 18.76 points, or 0.5%, to 3951.39. The technology-focused Nasdaq Composite dropped 76.06 points, or 0.7%, to 11379.48.
The Dow Jones Industrial Average spent most of the day in the red, then eked out a tiny gain of 5.14 points, or 0.02%, to 32661.84. The three U.S. indexes had closed February with monthly losses.
U.S. factory activity contracted for the fourth month in a row, according to the Institute for Supply Management's February survey, but the data came in slightly above analysts' projections. Manufacturers surveyed also said they saw signs of improving demand and accelerating price pressures in the months ahead.
Investors are concerned that if such economic data remains robust, it could prompt the Fed to raise interest rates further and keep them elevated in an effort to quell inflation.
ASIAN STOCKS
Japanese stocks were higher in early trade, led by gains in bank and insurance stocks thanks partly to gains in U.S. Treasury yields overnight. Gains in financial stocks were helping offset losses in tech and electronics stocks. Investors were focusing on economic data and their policy implications. The Nikkei Stock Average was up 0.2% at 27570.27.
South Korea's benchmark Kospi gained 1.1% to 2439.43 in early trade, led by steel, shipping and consumer stocks. Foreign and institutional investors were net buyers. Sentiment was buoyed by renewed hopes that China's border reopening could lead to an economic recovery. Korea has recently eased travel restrictions on Chinese visitors. South Korean exports shrank for a fifth straight month in February but at a milder-than-expected pace. USD/KRW was 1.2% lower at 1,306.50.
Hong Kong's Hang Seng Index fell 1.4% to 20333.85 amid concerns over higher U.S. interest rates. Treasury yields have risen on bets of more rate increases by the Fed, offsetting optimism spurred by strong China manufacturing data, the Phillip Securities research said. China Vanke lost 3.9% after saying it planned to raise funds via share placement. The Hang Seng Tech Index was down 2.0% at 4102.28.
Chinese stocks were slightly lower, retreating from a rally on Wednesday driven by positive February PMI data. Concerns persisted about headwinds from rising global rates, sticky inflation and geopolitical tensions. Telecom and property stocks were weighing on the market. Media companies were among the gainers. The benchmark Shanghai Composite Index edged down 0.1% to 3308.01, the Shenzhen Composite Index slipped 0.1% and the ChiNext Price Index fell 0.2%.
FOREX
Most Asian currencies weakened in the morning session amid higher Treasury yields, which increased the appeal of USD-denominated fixed-income assets and underpinned demand for the greenback. The U.S. ISM manufacturing PMI released overnight added to recent data pointing to a challenging "disinflation" process, said IG. Fed rate-increase expectations have recalibrated to the data, with more bets toward a higher terminal rate, it added. USD/KRW rose 0.4% to 1,310.77 and USD/SGD edged 0.1% higher to 1.3442, while AUD/USD was down 0.2% at 0.6748.
METALS
Gold was a tad higher in early Asian trade. "Treasury yields surged [overnight], the 10-year yield even tested above 4.00%, but gold didn't break [lower]. Bullion traders appear to be growing confident that they have priced in peak Fed tightening," Oanda said. As gold has remained around the $1,800 level, the next question is whether it can rise toward $1,878, it added. Spot gold edged 0.1% higher to $1,837.31/oz.
OIL SUMMARY
Crude oil prices were slightly higher in early Asian trade amid signs of recovering demand. China's positive February PMI data signaled that demand for oil could remain strong in a key market, while the increase in U.S. inventories was smaller than expected, said CMC Markets. The front-month contract for WTI futures edged up 0.1% to $77.74/bbl, while the front-month Brent crude contract was 0.1% higher at $84.37/bbl.
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(END) Dow Jones Newswires
03-01-23 2215ET
