Friday Morning Briefing: Asia Gains, Oil Near 3-Week High
Your Friday morning briefing: SGX Nifty drops after Thursday’s rally.
Equity markets in Japan got off to a positive start after the yen posted its biggest one-day drop against the dollar in a week. U.S. stocks closed mixed with the Dow Jones Industrial Average making a fresh record high, and S&P 500 Index and Nasdaq Composite Index closing in the red.
Oil hovered near a three-week high while gold extended its longest slide since December 22.
Markets in China, South Korea, Taiwan, and Vietnam will be closed for the start of Lunar New Year while those in Hong Kong, Malaysia and Singapore will have shortened sessions.
Japanese Inflation Drops
Consumer prices in Japan dropped for the 10th straight month but at the slowest pace in a year as oil costs increased and the yen weakened.
Bank of Japan’s core inflation gauge, which excludes prices of fresh foods, declined 0.2 percent in December compared to the year-ago period. The median forecast was for a 0.3 percent fall. Overall consumer prices, however, rose 0.3 percent. The December reading is still far away from the central bank’s 2 percent target.
Core consumer prices fell 0.3 percent in 2016, the first annual decline under Haruhiko Kuroda’s leadership of the Japanese central bank. The bank is slated to update its inflation forecast on January 31.
Jobless Claims Rise
Filings for unemployment benefits rose more than forecast last week amid holiday related volatility, according to data from the U.S. Labor Department.
Jobless claims increased by 22,000 to 259,000 for the week ending January 21, the highest in four weeks. The median projection of economists surveyed by Bloomberg called for a reading of 247,000.
Jobless claims have remained below 300,000 for 99 consecutive weeks, the longest streak since 1970. The Labor Department revised the previous week’s reading to 237,000 from an initially reported 234,000.
The Dow Jones Industrial Average extended its gains after hitting the 20,000 milestone for the first time on Wednesday. The S&P 500 Index ended 0.1 percent lower after scaling the 2,300 mark in Thursday’s session.
Oil headed for its second weekly gain as members of the Organization of Petroleum Exporting Countries (OPEC) and other non-members continued with output cuts in an attempt to stabilize the oversupplied market.
West Texas Intermediate crude was little changed near a three-week high after a 2 percent surge on Thursday. The contract has gained over 2.5 percent this week, the most since the week ended December 2.
Gold traded lower by 0.25 percent at $1,186 an ounce, extending its biggest slump since December 22.
Life After 8,600
The SGX Nifty Index dropped 0.32 percent to 8,667 as of 7:10 a.m. The futures gauge rose nearly 1 percent on Thursday, when the Indian benchmarks were shut on account of the Republic Day holiday.
The NSE Nifty 50 index had closed above the 8,600 mark on Wednesday, wiping out the losses suffered post the government’s demonetisation drive.
Stocks of Wipro Ltd. and Ashok Leyland Ltd. will be in focus after they posted their third quarter results post market hours on Wednesday. While Wipro guided for a muted revenue growth in the fourth quarter, higher input and forex costs played spoilsport for Ashok Leyland in the December quarter.