|18 October, 2018

Thursday outlook: Asian shares retreat following Fed’s latest meeting minutes

Threat of rising U.S. yields hit Wall Street stocks overnight and Asian shares in early trading. Most markets in the Middle East ended Wednesday’s trading higher. More commentary on oil prices, currencies and precious metals.

Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., May 11, 2018.

Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., May 11, 2018.

REUTERS/Brendan McDermid
  • Fed meeting pushes stocks lower
  • Most Middle East markets make gains
  • Oil prices rebound following losses overnight
  • Dollar and gold steady

Global markets

Minutes from the Federal Reserve’s latest meeting on September 25 and September 26 showed broad agreement among board members on the need to raise interest rates last month and also a general agreement that borrowing costs are set to rise further.

“This is consistent with the Fed’s rhetoric that they will continue to gradually raise interest rates. A lot has to happen for the Fed not to move again in December,” Ryan Sweet, head of monetary policy research at Moody’s Analytics in West Chester, Pennsylvania, told Reuters.

The threat of rising U.S. yields, and fears over ongoing trade tensions hit Asian shares in early trading on Thursday, tracking Wall Street’s reaction to the publication of  the latest Fed minutes.

MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.2 percent.

Overnight on Wall Street, the Dow Jones Industrial Average fell 91.74 points, or 0.36 percent, to 25,706.68, the S&P 500 lost 0.71 points, or 0.03 percent, to 2,809.21 and the Nasdaq Composite dropped 2.79 points, or 0.04 percent, to 7,642.70.

Middle East markets

Dubai’s index gained 0.5 percent on Wednesday, as Emaar Development added 2.4 percent and Dubai Islamic Insurance advanced 3.2 percent after saying it was raising its foreign ownership ceiling to 49 percent from 25 percent. Neighbouring Abu Dhabi’s index rose 0.5 percent.

Saudi Arabia’s index edged down 0.1 percent. Saudi Basic Industries rose 1.5 percent while National Commercial Bank retreated 3.5 percent, while Yamama Cement fell 0.5 percent after posting a loss for the third quarter.

Qatar's index rose 1.3 percent to 10,157 points as Qatar Islamic Bank added 1.8 percent on higher nine month net profit.

The Egyptian blue-chip index rose 0.9 percent as Edita Food Industries jumped 7.7 percent and Egyptian Resorts gained 5.2 percent.

Kuwait’s index edged up 0.2 percent while Bahrain’s index added 0.1 percent and Oman’s index was mainly flat.

Oil prices

Oil prices edged up on Thursday after dropping overnight.

Front-month London Brent crude for December delivery was up 23 cents, or 0.3 percent, at $80.28, having ended down 1.7 percent on Wednesday.

U.S. West Texas Intermediate crude for October delivery was up 17 cents, or 0.2 percent, at $69.92 a barrel by 0031 GMT, after falling 3 percent in the previous session to settle below $70 for the first time in a month.

Currencies

The dollar index, which measures the greenback against a basket of six major currencies, was mainly unchanged following the Fed’s decision. It was fairly flat in early trading on Thursday and last traded at 95.654, while 10-year Treasury bond yields last stood at 3.211 percent, 3.2 basis points higher than the U.S. close.

Precious metals

Gold prices were steady on Thursday.

Spot gold was up 0.1 percent at $1,223.13 an ounce at 0107 GMT. On Monday, it touched its highest since July 26 at $1,233.26 an ounce.

U.S. gold futures were down 0.1 percent at $1,226.40 an ounce.

(Reporting by Gerard Aoun; Editing by Michael Fahy)

(Gerard.aoun@refinitiv.com)


 

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