【Evening Market】Morgan: Now is the time to buy Asian stocks

AP stock markets fall

Asia-Pacific stock markets have generally fallen, and the market is worried that the surge in US inflation may prompt the Fed to tighten policy ahead of time, leading to the return of funds to the US. At the same time, a new round of the epidemic has become more and more serious in the Asia-Pacific region, which has also hit the market's risk sentiment. Among them, the Vietnamese stock market has fallen for five consecutive days and has fallen by more than 10% from the historical high reached last week.

The Nikkei 225 index fell 0.32% to close at 28627.39 points. The shipping, aviation, steel, and textile sectors led the decline, while the construction and utilities sectors rose.

Mixo Das, Asian equity strategist at JPMorgan Chase, said on Wednesday that now may be the best time to buy Asian stocks. The analyst said that the U.S. stock market has set record highs one after another, while European stock markets and Japanese stock markets have also approached historical highs, but Asian stock markets have not yet seen the same trend. "Since the high point was reached in February, Asian stock markets have fallen a lot. From our perspective, now may be a good time to buy."

European stock markets were soft in the early stages. The British FTSE index was last reported at 7079 points, down 45 points, a decrease of 0.63%; the German DAX index was last reported at 15,749 points, down 39 points, a decrease of 0.25%; the French CAC index was last reported at 6,543 points, a decrease of 14 points, a decrease 0.35 percent.

Oil prices fell slightly

Crude oil prices fell slightly. Previous data showed that China's crude oil imports fell in the first half of this year, which intensified fuel demand concerns. However, due to supply constraints during the economic recovery, oil prices remain near a week high.

US WTI crude oil futures prices fell 26 US cents, or 0.35%, to US$74.99 per barrel.

The price of Brent crude oil futures fell 22 US cents, or 0.29%, to US$76.27 per barrel.

Natural gas prices rose 0.30% to 3.702 US dollars.

According to reports, crude oil imports from China, the world's largest oil importer, fell by 3% year-on-year from January to June this year, the first drop since 2013. Insufficient import quotas, refinery maintenance, and rising oil prices led to reduced purchases.

Eurasia Group analysts said, “Surprising crude oil prices have eroded the profit margins of refineries and reduced imports... If OPEC+ does not agree to a full increase in production, high oil prices may also hit demand in other emerging markets that are more cost-sensitive, especially India."

At present, there are still less than three weeks to go until August, but OPEC+ still has differences on the future output policy, and it is expected that no meeting will be held in the near future.

At the same time, the International Energy Agency (IEA) said that due to the decline in inventories in the United States, Europe and Japan, global inventories are expected to fall at a 10-year high in the third quarter of this year.

Gold price rises slightly

At midday in the Asian market, gold futures prices rose slightly. At the same time, the US dollar index futures, which are usually negatively correlated with gold prices, stabilized overnight after setting the biggest one-day increase in the next month. Data released on Tuesday showed that the US June Consumer Price Index (CPI) hit the biggest increase in 13 years.

Spot gold prices rose 5 US dollars, or about 0.28%, to 1,812.76 US dollars per ounce.

Gold futures prices rose 3.25 US dollars, or about 0.18%, to 1,813.15 US dollars per ounce.

The U.S. dollar index futures, which measures the U.S. dollar's trend against six major trade-weighted currencies, fell 0.05% to 92.710.

Data show that the annual rate of CPI in the United States in June unexpectedly rose to 5.4% from 5.0% in May, setting a new high since August 2008, while the market was expected to drop to 4.9%. The monthly rate unexpectedly rose from 0.6% to 0.9%.

USD remains stable

In the European market in early trading, the US dollar index basically remained stable at around 92.70. Investors focused on the Federal Reserve Chairman Powell's testimony this day, which is expected to trigger significant market volatility. The agency DeltaStock wrote an article to analyze the intraday technical trends of the EUR/USD, USD/JPY and GBP/USD.

At 00:00 Hong Kong time on Thursday, Fed Chairman Powell will testify on the semi-annual monetary policy report before the House of Representatives Financial Services Committee.

Powell made dovish remarks during his recent testimony to Congress. On June 22, local time, Powell stated at the House of Representatives hearing that the Fed will not preemptively raise interest rates because of inflation, but will wait patiently for other economic data.

Analysts pointed out that if Powell shows a dovish stance again, it will suppress the US dollar and promote other major currencies such as the euro and the pound sterling.