Daily market review

United States

Equities ended flat to better Monday with energy stocks up on rising oil prices while tech and health care stocks sagged in lackluster trading. The Dow Jones industrial average rose 0.8 percent, the S&P 500 firmed 0.2 percent and the NASDAQ was down 0.1 percent.

Sentiment was cautious after weekend press coverage highlighted concerns that markets are due for a correction, along with discussion of prospects for Federal Reserve tapering, possible U.S. tax increases, and supply chain disruptions. On the positive side, rising crude oil prices boosted oil supermajors and oil servicers, while banks advanced despite lower bond yields. Airlines, chipmakers, and autos also outperformed.

Health care was the worst performer on a selloff in biotechs after The Lancet published a review saying Covid-19 booster shots are not needed for the general population. Tech lagged on declines in software, with Salesforce down 1.2 percent and Oracle down 0.9 percent.

Cryptocurrencies and related stocks fell after a fake press release was transmitted on GlobeNewsWire announcing a partnership between Walmart and litecoin, the cryptocurrency. Walmart later confirmed it does not plan to start accepting payment in litecoin.

These price data reflect observations at 4:00 PM US ET: Dated Brent spot crude oil rose 73 cents to US$73.56 while spot gold rose US$4.89 to US$1,793.25. The US dollar was mixed vs. major currencies. The US Treasury 30-year bond yield fell 3 basis points at 1.90 percent and the 10-year note yield declined 2 basis points to 1.32 percent.


Equities edged up with support from rising oil prices and strength in automakers. The Europe-wide STOXX 600 rose 0.3 percent, the German DAX rose 0.6 percent, the French CAC firmed 0.2 percent, and the UK FTSE-100 firmed 0.6 percent.

Among sectors, energy stocks fared best as oil prices rebounded on concerns about US oil output after damage from Hurricane Ida, with more storms headed for the US Gulf of Mexico. Royal Dutch Shell rose 2.4 percent and BP was up 1.2 percent to help UK stocks outperform. Autos & parts gained, with Daimler up 3.9 percent and BMW up 3.0 percent after a report on their plans to limit supplies and boost prices. Other winners included banks, utilities, insurance, and construction & materials. On the downside, retail, technology, health care, travel & leisure, and financial services lagged.

Among companies in focus, S4 Capital, the UK digital marketing firm, fell 3.4 percent, and ITM power, the UK chemicals maker, lost 12 percent, and Associated British Foods fell 2.4 percent on earnings misses. On the positive side, Helvetia, the Swiss insurer, rose 2.3 percent, and FirstGroup, UK transport group, rose 32 percent after better trading results.

Asia Pacific

Asian equities markets were mixed with Hong Kong lagging after another salvo in China's regulatory crackdown. Activity was limited ahead of US CPI figures due Tuesday.

China's latest proposed restrictions against tech giants, including its threat to break up Alibaba's Alipay unit, pushed Hong Kong's Hang Seng down by 1.5 percent. China's CSI 300 dipped by 0.4 percent and the Shanghai composite firmed 0.3 percent. Among mainland Chinese stocks, growth lagged while value held up better. Energy and materials stocks advanced while tech and telecom sagged.

South Korean equities recovered from early losses to end nearly flat with the KOSPI up 0.1 percent while Taiwan's benchmark Taiex fell 0.2 percent.

Japanese markets managed modest gains after initial profit-taking pressure. The Nikkei rose 0.2 percent and the broader Topix gained 0.3 percent. Among sectors, energy and iron & steel stocks advanced. On the downside, automakers suffered after Toyota (down 1.7 percent) announced plans to cut production for the current fiscal year due to semiconductor and other components shortages. Renesas, the chipmaker, rose 4.4 percent.

A better showing for commodities producers helped Australian equities end higher with the All Ordinaries up 0.3 percent. Reopening plays including consumer discretionary stocks got a lift from news Australia is securing more vaccines. Tech and financial stocks lagged.

Looking ahead*

In Asia/Pacific, Indian wholesale price index, Chinese house price index, and Australian property price figures are due for release. In Europe, Swiss producer and import prices and UK labor market reports are scheduled. In North America, the US CPI, US NFIB small business sentiment, and Canadian manufacturing sales reports are on tap.

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