Indian indices should get off to a positive start on Wednesday. Dalal Street rebounded strongly on Tuesday after tracking gains in US and Asian indices. Wall Street indices, however, suffered overnight losses as mixed corporate earnings, the Covid situation in China and the prospect of aggressive rate hikes by the US Fed suggested a deteriorating economic outlook. U.S. stock futures shook after the S&P 500 fell to a six-week low and the tech-heavy Nasdaq 100 fell to levels last seen in 2021. Oil prices rose also increased after the Chinese central bank pledged to support its economy. Asian investors followed their US counterparts as the fall on Wall Street dampened risk appetite. Shares fell in Japan, South Korea, Hong Kong, Shanghai and Australia in early trading on Wednesday.
Gold retreats thanks to the strength of the dollar
Gold prices fell on Wednesday as the dollar held at its highest level in more than two years and put pressure on demand for bullion at the dollar price. Spot gold was down 0.1% at $1,903.16 an ounce by 0037 GMT. US gold futures rose 0.1% to $1,905.80.
Tesla loses $126 billion in value amid Musk Twitter deal funding concerns
Tesla Inc lost $126 billion in value on Tuesday amid fears Chief Executive Elon Musk would have to sell shares to fund his $21 billion equity contribution to his $44 billion takeover of Twitter Inc.
Tesla is not involved in the deal on Twitter, but its actions have been targeted by speculators after Musk refused to publicly disclose where his money for the acquisition came from. Tesla’s 12.2% drop on Tuesday equates to a $21 billion drop in the value of its Tesla stake, the same as the $21 billion in cash it committed to the Twitter agreement.
Wedbush Securities analyst Daniel Ives said concerns about Musk’s upcoming stock sales and the possibility of him being distracted by Twitter weighed on Tesla shares. “It (causes) a bear fest on the name,” he said.
Wall Street banks slash Chinese corporate earnings forecast as Covid drags
Equity investors are bracing for a slew of earnings reports and forecasts that will offer clues as to how Chinese companies are being impacted by the recent Covid outbreak.
About a quarter of China’s more than 4,700 listed companies have released their first-quarter results, according to data compiled by Bloomberg. With companies given until the end of the month to report earnings, analysts are slashing forecasts as strict lockdown measures strain supply chains and dampen consumption.
Stocks show tension in a market where the benchmark CSI 300 index is down 23% this year. Solar panel component maker Sungrow Power Supply Co. posted earnings below expectations last week, triggering a 28% drop in its shares over two days. Battery giant Contemporary Amperex Technology Co. delayed its results, sending shares down 9% this week.
Xi calls for ‘all-out’ infrastructure push to boost economy
Chinese President Xi Jinping has made a bold pledge to boost infrastructure construction, the latest pledge by officials to support the economy as it is hammered by a series of Covid-related lockdowns.
All efforts should be made to boost infrastructure spending, Xi said at a meeting of the Central Committee for Financial and Economic Affairs on Tuesday. Infrastructure is a pillar of economic and social development, Xi added, according to a report by the official Xinhua News Agency.
The meeting decided that the country’s infrastructure is still incompatible with the demand for development and national security, according to Xinhua. Strengthening infrastructure construction comprehensively is of great importance for ensuring national security, expanding domestic demand and other goals, he said.
Tokyo’s Nikkei index slips more than 2% in early trading
Tokyo’s key Nikkei index slid more than 2% in early trading on Wednesday, extending a rout on Wall Street where fears grew over a global economic slowdown.
The Nikkei 225 index was down 2.33%, or 621.90 points, at 26,078.21 about 10 minutes after the opening bell, while the broader Topix index was down 1.86 %, or 34.91 points, at 1,843.60.
“Japanese stocks are starting with a huge drop after Wall Street falls” where the three major indexes plunged “on growing concerns about the global economic slowdown as China extended the lockdown” of Shanghai, the report said. senior market analyst Toshiyuki Kanayama of Monex in a note.
Worse-than-expected U.S. indicators, including durable goods orders in March, also weighed on the market, he added.
Dollar nears pandemic highs as investors seek safety
The dollar stood at its highest level since the early days of the pandemic on Wednesday and was heading for its best month since 2015, buoyed by the prospect of U.S. rate hikes and safe-haven flows stoked by slowing global currency. growth in China and Europe.
The U.S. dollar index, which measures the greenback against a basket of six major currencies, held at an overnight high of 102.37, the strongest since March 2020.
The euro fell below its pandemic low at $1.0635 in early trade, a five-year low, on fears for Europe’s energy security and growth after Russia’s Gazprom announced that would shut off gas supplies to Poland and Bulgaria later in the day.
Commodity currencies were also sold off in favor of the greenback, taking the New Zealand dollar back near this year’s lows at $0.6562 and the Australian dollar to a two-month low at 0.7119. $.
Stocks fall as economic growth outlook darkens
Stocks fell on Wednesday as mixed corporate earnings, China’s struggles with Covid and the prospect of aggressive monetary tightening from the Federal Reserve all pointed to a deteriorating economic outlook.
Stocks fell in Japan, Australia and South Korea. U.S. stock futures faltered after the S&P 500 slipped to a six-week low and levels in the tech-heavy Nasdaq 100 were last seen in 2021.
Risk aversion supported sovereign bonds in Australia and New Zealand. Treasuries pared some of Tuesday’s strong rally that was led by shorter maturities. A dollar gauge was around the highest mark in nearly two years.
The euro hit the weakest level against the greenback since 2017 amid fears Moscow could choke off gas flows to Europe, hurting growth in the region following the ongoing fallout from the coronavirus crisis. Russian invasion of Ukraine.
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