Equities Slide Before Key Central Bank Meetings: Markets Wrap
Bloomberg · 31 Jan 2.2K Views

(Bloomberg) -- US and European stock futures and Asian shares fell Tuesday as investors positioned for interest-rate hikes this week from the Federal Reserve and the European Central Bank.

Benchmarks for China, Japan, India, South Korea and Australia all dropped, with small early gains in some markets evaporating. The moves extended on a torrid session on Wall Street that dragged the Nasdaq 100 to its worst day since Dec. 22 as Apple Inc. and Microsoft Corp. weighed on the market.

The selloff in Adani Group shares continued, with 10 of the conglomerate’s companies seeing about $75 billion in market value erased after US short-seller Hindenburg Research leveled fraud accusations last week. Flagship Adani Enterprises Ltd. was up about 2% as the company’s $2.5 billion follow-on share sale entered its final day. Abu Dhabi’s International Holding Co. said it will invest about $400 million via the sale.

Samsung Electronics Co. fell more than 3.5% in Seoul, weighing on South Korea’s Kospi gauge, after profit slumped on poor demand for semiconductors and weakness in smartphones and memory chips.

In Hong Kong, Alibaba Group Holding Ltd.’s decline this week reached around 10% amid concern that China’s consumer recovery may fail to meet lofty expectations.

The drop in Alibaba, and Chinese shares in general, still leaves them well up this year. An index of global equities also remained on course for a gain of about 6% in January.

Investors turned cautious on Tuesday ahead of the central bank decisions and data releases later in the week, with better-than-expected PMI numbers in China failing to lift stocks, according to Charu Chanana, a senior strategist at Saxo Capital Markets in Singapore.

A measure of dollar strength was largely unchanged after the greenback climbed versus all its Group-of-10 counterparts on Monday. The Australian dollar fell the nation’s retail sales data missed estimates.

The yield on 10-year Treasuries was little changed around 3.54%. Japan’s 10-year yield advanced 1.5 basis points to 0.49%, just short of the central bank’s 0.5% ceiling.

Hanging over everything is Wednesday’s Fed decision, with the US central bank widely expected to raise rates by a quarter percentage point. Investors will be watching for the tone officials set for future meetings after Fed Chair Jerome Powell’s consistent efforts to push back against traders anticipating rate cuts later this year.

The rally in stocks this month suggests the market has so far brushed off Powell’s warning of “higher-for-longer” interest rates.

“Even after they’ve stopped on the rate hikes, there is still the quantitative tightening that still poses a threat for a lot of risk assets,” Mary Nicola, a global multi-asset portfolio manager for PineBridge Investments, said in an interview with Bloomberg Radio.

Elsewhere in markets, oil fell further after touching a three-week low on Monday. Traders are waiting for more clues on Chinese demand, the Fed decision and the latest guidance from OPEC+.

Also on the agenda for the week are policy meetings in Europe and the UK on Thursday, and the US jobs report on Friday. A less tight labor market is a key goal for the Fed.

Key events this week:

  • Eurozone GDP, Tuesday

  • US Conference Board consumer confidence, Tuesday

  • Earnings Tuesday include: UBS, Unicredit, Snap and Advanced Micro Devices

  • Eurozone Manufacturing PMI, CPI, unemployment, Wednesday

  • US construction spending, ISM Manufacturing, light vehicle sales, Wednesday

  • FOMC rate decision, Fed Chair Jerome Powell press conference, Wednesday

  • Earnings Wednesday include: Meta Platforms and Peloton Interactive

  • Eurozone ECB rate decision, President Christine Lagarde press conference, Thursday

  • UK BOE rate decision, Thursday

  • US factory orders, initial jobless claims, US durable goods, Thursday

  • Earnings Thursday include: Alphabet, Apple, Amazon, Qualcomm and Deutsche Bank and Santander

  • Eurozone S&P Global Eurozone Services PMI, PPI, Friday

  • US unemployment, nonfarm payrolls, Friday

Some of the main moves in markets:


  • S&P 500 futures were little changed as of 6:52 a.m. London time. The S&P 500 fell 1.3%

  • Nasdaq 100 futures fell 0.2%. The Nasdaq 100 fell 2.1%

  • Japan’s Topix fell 0.4%

  • Hong Kong’s Hang Seng fell 1.9%

  • The Shanghai Composite fell 0.4%

  • Euro Stoxx 50 futures fell 0.5%


  • The Bloomberg Dollar Spot Index was little changed

  • The euro was little changed at $1.0842

  • The Japanese yen rose 0.1% to 130.21 per dollar

  • The offshore yuan was little changed at 6.7576 per dollar

  • The Australian dollar fell 0.4% to $0.7035

  • The British pound was little changed at $1.2347


  • The yield on 10-year Treasuries was little changed at 3.54%

  • Japan’s 10-year yield advanced 1.5 basis points to 0.49%

  • Australia’s 10-year yield advanced two basis points to 3.55%


  • West Texas Intermediate crude fell 0.6% to $77.47 a barrel

  • Spot gold fell 0.5% to $1,914.41 an ounce

(Source : Bloomberg) , all rights reserved by original source.