GLOBAL MARKETS-U.S. shares drop as soaring oil prices stir inflation woes; Yen wilts

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(Updates closer to US market)

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* Oil rises as US stocks fall as inflation risks rise

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* Dollar hits highest level on yen since late 2018

* Concerns about Chinese property developer Evergrande could put Asia on edge

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NEW YORK, Oct 11 (Businesshala) – US stocks tumbled on Monday, seeing a whiff of gains and losses, as several-year peaks in oil prices fueled rising prices and fears about tighter monetary policy, denting the dollar. Almost picked up. Three-year high against the yen.

A rally in basic materials and energy stocks on higher oil prices initially lifted major US stock indices. But gains faded as investors focused on the start of US corporate earnings season next week.

Some analysts anticipate businesses reporting slower growth due to supply-chain malfunctions and rising prices. He warned that this could lead to a fall in US stocks.

Morgan Stanley analysts said in a note, “Whether the final chapter of the mid-cycle transition ends with a 10% or 20% correction in the S&P 500 will be determined by how much earnings decline or outright decline.” has come.”

“We are gaining confidence in a sharp recession but the timing is more uncertain.”

The Dow Jones Industrial Average lost 0.72%, the S&P 500 0.69% and the Nasdaq Composite lost 0.64%.

The pan-European STOXX 600 index changed little, gaining only 0.05%, while MSCI’s worldwide shares fell 0.33%.

Moving towards Tuesday, the mood in Asia could also be affected by news that Chinese property developer Evergrande may miss its third round of bond payments in as many weeks and rivals Modern Land and Cynic are the latest moves to delay deadlines. are killing.

Oil prices, which had jumped on Monday due to lack of demand and cut in supply, gave up some of their early gains but still ended the session higher.

Brent crude rose 1.5% to $83.65 a barrel, its highest level since October 2018 after climbing to a high of $84.60.

US West Texas Intermediate crude also ended up 1.5% at $80.52, after touching a high of $82.18 since late 2014.

Analysts are divided on whether energy supplies are tight enough to warrant a $100 per barrel oil test, but most agree that prices are likely to remain higher in the short term.

This helped support basic materials and energy stocks in the S&P 500. They jumped 0.96% and 0.88% respectively, Refinitiv data showed, outperforming the broader market.

Rising prices are also raising bets that major central banks will tighten monetary policy sooner rather than later, pushing the dollar to a nearly three-year peak against the Japanese yen.

In the United States, investors expect the Federal Reserve to begin a tougher policy next month by announcing it will reduce its massive bond-buying. This has affected the yen, which is generally sensitive to interest rate differentials.

The yen weakened 1.02% against the greenback at 113.38 per dollar and the dollar index rose 0.238%.

A stronger dollar pushed the euro down 0.14% to $1.1551.

Gold, generally seen as a hedge against inflation, fell as a stronger dollar offset any inflation-driven gains. Spot gold fell 0.2% to $1,753.42 an ounce. US gold futures fell 0.15% to $1,753.60 an ounce.

Bitcoin, a barometer of investors’ risk appetite, lost a touch but was still up a solid 4.4%.

Additional reporting by Tom Arnold in London and Wayne Cole in Sydney; Editing by Simon Cameron-Moore, Jacqueline Wong, Alex Richardson, Andrew Heavens and Dan Grebler


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