Daily market review

United States

Equities fell back Thursday on lack of progress in Russia-Ukraine talks and on another hot US inflation reading but retreating oil prices helped the market recover from midday lows. The Dow Jones industrial average lost 0.3 percent, the S&P 500 fell 0.4 percent, and the NASDAQ dropped 1.0 percent.

Growth stocks, the biggest winners in yesterday's rally ahead of the Russia-Ukraine talks, lagged Thursday as bond yields ticked up on inflation fears. Most FANMAG stocks declined, led by losses in technology, especially chipmakers which are seen vulnerable to supply disruptions due to the Ukraine conflict. Autos and parts lagged too, along with retail, homebuilders, banks, biotech, and food & beverage. Apple, down 2.7 percent, Intel, down 2.0 percent, and Microsoft, down 1.0 percent, were weights on the major averages.

Energy stocks held up best, despite the day's softness in oil prices. Chevron, up 2.7 percent, was among the day's best performers, and Haliburton rose 9.0 percent as the market expects booming business for Western oil producers. Oil prices turned down Thursday after conflicting statements from United Arab Emirates officials on whether the UAE would back higher oil output. Other stock sectors outperforming Thursday included precious and industrial metals, chemicals, machinery, and consumer-staples retailers, including Walmart, up 2.3 percent.

Among companies in focus, Amazon rose 5.4 percent after announcing a 20-1 stock split and share buyback. CrowdStrike, the cybersecurity company, rose 13 percent on earnings and revenues beats. Genesco, the retailer, rose 12 percent after an earnings beat. On the downside, Cisco fell 2.2 percent on an analyst downgrade.

In economic news, US consumer prices rose 0.8 percent in February on the month, just above expectations for a 0.7 percent gain, while ex-food & energy CPI rose 0.5 percent, in line with expectations. The results left intact expectations for a 25 basis point rate increase next week to start the Federal Reserve's tightening cycle, while expectations for rate increases later in the year appear to be rising, in response to inflation concerns that have been heightened by soaring commodities prices.

These price data reflect observations at 4:00 PM US ET: Dated Brent spot crude oil fell US$3.40 to US$109.47 while spot gold rose US$5.20 to US$1997.66. The US dollar rose against major currencies. Yields on the US Treasury 30-year bond rose 6 basis points to 2.37 percent, and the 10-year note rose 4 basis points at 1.98 percent.


Disappointing news from Russia-Ukraine talks and a hawkish turn from the European Central Bank undercut equities. The Europe-wide STOXX 600 lost 1.7 percent, the German DAX declined 2.9 percent, the French CAC fell 2.8 percent, and the UK FTSE 100 was down 1.3 percent.

Equities gave back some of Wednesday's rally as Russia-Ukraine talks did not yield substantive progress. Negative reaction was muted somewhat by hopes for more talks and lower oil prices. Meanwhile, risk appetite suffered after the ECB delivered a faster-than-expected taper in its asset purchase program and appeared to threaten faster rate increases, though it said all its moves would hinge on incoming economic data.

Among sectors, worst were banks, technology, retail, travel & leisure, and autos & parts. Basic resources outperformed as commodities bounced back from Wednesday's dramatic losses.

Among companies in the news, Hugo Boss, the luxury clothing company, fell 7.9 percent after disappointing guidance. Carlsberg, the brewer, lost 4.6 percent after withdrawing its guidance due to uncertainty over sales in Russia. Credit Suisse lost 3.0 percent after reporting on its Russia exposure. Vimian, the animal health company, fell 4.8 percent after halting shipments to Russia and cancelling its dividend.

Asia Pacific

Asia-Pacific equities popped up as oil prices fell back and markets hoped for progress in Ukraine-Russia talks.

Chinese stocks advanced with the CSI 300 index up 1.6 percent and the value-stock heavy Shanghai composite up 1.2 percent. Growth stocks outperformed. Among sectors, health care and industrials fared best while real estate and energy lagged. Hong Kong's Hang Seng index advanced 1.3 percent, paced by biotechs while oil & gas lagged on the retreat in oil prices. Hong Kong tech stocks ended well down from the day's highs on late profit-taking.

Japanese markets rebounded in line with the rally on Wall Street, with all sectors higher and growth stocks outperforming. The Nikkei 225 jumped 3.9 percent and the broader Topix gained 4.0 percent. Autos, marine shipping, and air transport stocks led the advance.

The Taiwan Taiex rose 2.5 percent and the Indian BSE Sensex gained 1.5 percent as risk appetite revived on hopes for progress in Ukraine-Russia talks. South Korea's KOSPI rose 2.2 percent following the election of conservative Yoon Suk-yeol as president. Yoon has promised to strengthen security relations with both the US and Japan.

Australian equities tracked US markets higher with the All Ordinaries index up 1.1 percent. Most sectors rose, not including energy and other commodity stocks as commodities prices retreated. Rio Tinto, the miner, fell 2.3 percent after announcing it will cut ties with Russian businesses.

Looking ahead*

In Asia/Pacific, the Japanese household spending, Indian industrial production, and Chinese new yuan loan reports are scheduled. In Europe, German CPI, UK industrial production, UK merchandise trade, UK monthly GDP, and Italian unemployment rate reports are due. In North America, the Canadian Labour Force Survey and US consumer sentiment reports are on tap.

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