Indian indices may open flat to negative on Friday. The market extended gains for the third day on Thursday as the Bharatiya Janata Party won 4 out of the 5 states, including the crucial Uttar Pradesh. The US markets, on Thursday, edged lower as the US inflation hit a 40-year high, which could mean the US Federal Reserve hiking interest rates in the next week’s monetary policy meeting. No progress in the talks between Russia and Ukraine also soured market sentiments.
In Asia, shares in Japan, Australia, Hong Kong, and Shanghai declined in early trade on Friday.
India’s sugar exports accelerate on global price rally, weak rupee
Indian sugar mills signed contracts to export 550,000 tonnes of the sweetener in recent days, as surging global prices and a weak rupee made overseas sales lucrative, four dealers told Reuters.
Oil’s sizzling rally takes breather after tumultuous week
Oil is heading for the biggest weekly decline since November, taking a breather after a period of wild trading and a surge in prices that followed Russia’s invasion of Ukraine.
Futures in New York fell below $106 a barrel on Friday and are down almost 9% this week after the market was rocked by news of the U.S. ban on Russian crude imports and what looked to be the first signs of OPEC+ disunity. In two of the four trading sessions this week, Brent oil has swung by the most on record — with intraday swings eclipsing $20 a barrel.
The fallout from the war has rippled through commodity markets from wheat to key fuels such as gasoline and diesel, increasing inflationary pressure around the world. Rystad Energy predicted Brent could soar to an eye-watering $240 a barrel this summer if countries continue to sanction Russian oil imports.
Global bond rout accelerates in Asia as inflation fears spread
Sovereign bonds sold off in Australia and New Zealand after U.S. inflation accelerated to a fresh 40-year high, underscoring global concerns that price pressures were getting out of hand even before oil spiked higher.
New Zealand 10-year yields rose five basis points to top 3% for the first time since June 2018, while similar-dated Australian yields rose by the same amount to reach 2.42%. Data out Friday in Wellington showed New Zealand food prices soared in February at fastest annual pace since 2011.
Treasury yields have surged more than 20 basis points across the curve this week while there have been even steeper increases for some European markets, were the impact on energy costs from the war in Ukraine is likely to be most acute. The European Central Bank’s unexpected decision to accelerate the wind-down of its asset-purchase program also spooked investors.
Dollar hits 5-year high on yen, euro pressured by growth risks
The dollar hit a new five-year high on the yen on Friday after a strong U.S. inflation report, while the euro struggled to hold its own as a hawkish turn from the European Central Bank was offset by growth risks emanating from the Ukraine crisis.
The greenback rose as high as 116.39 yen in early trade, its best level since January 2017, while sterling was beaten down at $1.3089, having tumbled 0.8% overnight to a 16 month-low.
Wall Street closes lower as inflation hits 40-year high, inviting aggressive Fed tightening
Wall Street resumed its slide on Thursday, ending in the red as inflation hit a four-decade high, cementing expectations that the U.S. Federal Reserve would hike key interest rates at the conclusion of next week’s monetary policy meeting to prevent the economy from overheating.
Looming uncertainties surrounding Russia’s invasion of Ukraine also helped convince market participants to recommence their flight to safety.
While all three major indexes ended in the red, they pared their losses late in the day and closed well above session lows, as the U.S. equities market followed its best day in months on Wednesday by renewing a multi-session sell-off.
Amazon.com provided one of the day’s bright spots, its shares jumping 5.4% after the e-commerce giant announced a 20-for-1 stock split and a $10 billion share buyback.
The Dow Jones Industrial Average fell 112.18 points, or 0.34%, to 33,174.07, the S&P 500 lost 18.36 points, or 0.43%, to 4,259.52 and the Nasdaq Composite dropped 125.58 points, or 0.95%, to 13,129.96.
Six the 11 major sectors in the S&P 500 closed in negative territory with tech suffered the biggest percentage drop, while energy shares saw the largest gain.
Global shares fall on inflation, central bank moves
Global share markets slid on Thursday as U.S. inflation hit almost 8%, making it almost certain the U.S. Federal Reserve will raise interest rates next week, and the European Central Bank sped up the end of its massive stimulus program.
Data showed U.S. consumer inflation running at a 7.9% annualized clip in February, the largest annual increase in 40 years.
Wall Street fell on the data because, while markets expect the central bank to raise the Fed funds target rate by 25 basis points at the conclusion of next week’s monetary policy meeting, the CPI data suggested the FOMC could move “more aggressively” to curb inflation, as promised by Fed Chair Jerome Powell last week.
Asia stocks fall on inflation angst; oil edges up
Asian equities fell Friday, following declines on Wall Street as the fastest inflation in 40 years drove U.S. bond yields higher and raised expectations for steeper interest-rate hikes.
Stocks in Japan and Australia slid and futures pointed to a weaker open for Hong Kong. U.S. contracts were little changed after a selloff Thursday. The Nasdaq 100 took the brunt the war in Ukraine showed no sign of easing, weighing on sentiment, though the S&P 500 closed off the day’s lows.
Oil pared overnight losses but is still more than 7% lower on the week. The 10-year U.S. Treasury yield was steady after touching above 2%, while the 30-year rate reached the highest since May 2021. Money-market traders ratcheted up positioning for higher rates this year to close to seven quarter-point moves. The dollar trimmed overnight gains.
Chinese stocks trading in the U.S. were pummeled, with the Nasdaq Golden Dragon China Index plunging 10% Thursday, its biggest slide since October 2008.
This latest evidence of inflationary pressure snapped fledgling rallies across global markets as hopes of progress in talks between Russia and Ukraine faded. The data compounded investors’ concerns about the risks to the global economy from the conflict-driven surge in commodity markets over the past couple of weeks.