Cautious Trading in Asia On Elevated Energy Prices

Arjun Pandit
14 Jun, 2022
New York City

Asian markets were on the defensive on the growing worries of global economic slowdown, rising energy prices, and extended lockdowns in China. 

The Nikkei index fell 1.3% to 26,692.86, the Hang Seng Index closed nearly unchanged at 21,067.99, and the Sensex index edged lower 0.3% to 52,693.57. 

Investors were on the edge after market indexes extended losses in New York for a third day in a row. 

The S&P 500 index dropped 3.9% and the Nasdaq Composite index declined 4.7% ahead of the interest rate decision on Wednesday. 

The dramatic declines came on top of similar losses in the last two days in the previous week after the U.S. inflation accelerated in May to the fastest pace of 8.6% since December 1981. 

The Nikkei index dropped as much as 2.2% before recovering in the afternoon on the worries of inflation. 

The index declined for the third day in a row as crude oil prices stayed firm near $123 a barrel price level in international markets. 

Japan, one of the largest importers of crude oil in the world, is battling energy price inflation that is slowly sipping in the broader economy after decades of deflations. 

The broader Topix index declined 1.2% led by losses in tech, healthcare and real estate companies. 

Softbank Group fell 2.6% to 5,033 yen. 

Automakers fell on the persistent supply chain disruption worries. Toyota Motors declined 1.7% to 2,095 yen, Nissan Motor fell 1% to 539.20 yen, and Honda Motor dropped 0.2% to 3,287 yen. 

The indexes in Shanghai and Hong Kong opened higher but trimmed gains on the worries that the lockdowns in Shanghai and Beijing may be expanded to more regions and extended again. 

The Kospi average dropped 0.46% to 2,492.97 on the rate hike worries in Korea. 

LG Energy Solution rose 2.8% after the company announced a new battery manufacturing plant in South Korea. The 4680 battery cells made by LG are used by Tesla in its electric vehicles. 

Mumbai stocks struggled to rise above the weak sentiment in global markets and wholesale inflation surged to a record high in a decade.  

The Sensex index declined 153.13 or 0.3% to 52,693.57 and the Nifty index dropped 42.30 or 0.27% to 15,732.10. 

India's wholesale inflation accelerated to 15.88% in May from 13.11% in April, according to the latest data released by the Ministry of Commerce & Industry. 

The latest bout of inflation was driven by rising prices in petroleum products, chemicals, and food and no-food items. 

The index is at a record high since the current data series began in 2011.

Adani Enterprises jumped 5.6% to 2,197.60 rupees after the company agreed to sell a 25% minority stake in its subsidiary Adani New Industries to France-based TotalEnergies. 

New Industries plans to build green hydrogen production and ecosystem with the aim of investing $50 billion over the next 10 years. 

The Australian market index ASX 200 fell 3.55% to 6,686.58 after a day of holiday and catching up with market losses around the world on Monday. 

The mining companies BHP Group fell 4.2% to $44.26, Rio Tinto declined 4.2% to $111.50, and Fortescue plunged 8.5% to $19.63 after iron ore prices eased.