US: Stocks tumble on inflation woes

The US stocks mostly tumbled on Monday, 04 October 2021, dragging the major three indexes deeply in negative territory, as investors fret over higher interest rates, high commodity prices, a surge in Treasury yields, and tighter monetary policy. Sentiment was also dented after US President Joe Biden statement that he cannot guarantee the US government will not breach its US$28.4 trillion debt limit unless Republicans join Democrats in voting to raise it. Further denting sentiments was due to concerns that the regulatory crackdowns and a collapse at Evergrande could hurt an already fragile Chinese economy and weigh on global growth.

At the close of trade, the Dow Jones Industrial Average index declined 323.54 points, or 0.94%, to 34,002.92. The S&P500 index fell 56.58 points, or 1.3%, to 4,30046. The tech-heavy Nasdaq Composite Index dropped 311.21 points, or 2.14%, to 14,255.48.

Total volume turnover on U.S. exchanges stood at 9.17 billion shares, up from yesterday's 8.98 billion shares. In the NYSE exchange, 1190 issues advanced, 2181 issues declined, and 130 issues closed unchanged. In the NASDAQ, 1249 issues advanced, 3346 issues declined, and 200 issues unchanged.

Total 8 of 11 sectors ended down along with the S&P500 index, with information technology (down 2.36%) was bottom performing sector, followed by communication services (down 2.1%), healthcare (down 1.49%), and consumer discretionary(down 1.07%) sectors, while energy (up 1.6%) was top gaining sector, followed by utilities (up 1.4%) sector.

Shares of big tech companies slid, with Facebook was among the worst-performing stocks on the S&P 500, declining 4.9 per cent as its Instagram, WhatsApp and namesake Facebook services suffered outages. Stocks of Apple, Microsoft, Facebook and Amazon also suffered notable losses.

ECONOMIC NEWS: US Factory Orders Surge 1.2% In August - US factory orders surged up by 1.2% in August after climbing by an upwardly revised 0.7% in July, a report released by the Commerce Department on Monday showed. The report showed orders for durable goods shot up by 1.8%, while orders for non-durable goods rose by 0.6%. Meanwhile, the Commerce Department said shipments of manufactured goods inched up by 0.1% in August after jumping by 1.5% in July. Inventories of manufactured goods also climbed by 0.6% in August, matching the increase seen in the previous month. The inventories-to-shipments ratio was 1.47, unchanged from July.

COMMODITY NEWS: Crude oil prices hit a seven-year high on Monday, as producer group Opec+ stuck to existing output plans at its latest meeting, despite a surge in natural gas prices increasing oil demand. Members had agreed this summer to add 400,000 barrels a day of production each month until the end of next year. West Texas Intermediate, the US oil benchmark, hit $78 a barrel, its highest level since 2014, before settling up 2.3 per cent at $77.62 a barrel. Brent, the international benchmark, rose to $82 a barrel for the first time in three years before settling at $81.26 a barrel, up 2.5 per cent.

Base metal prices were mostly higher on Monday. China's efforts to rein in a burgeoning energy crisis continued to dominate the supply and demand outlook. Aluminium rose by 2.1%, but nickel fell by 0.3%.

Among Indian ADR, Wipro fell 1% to $8.85, INFOSYS fell 0.8% to $22.15, Dr Reddys Labs added 1.4% to $67.25, WNS Holdings fell 1.5% to $81.80, HDFC Bank dropped 1.4% to $72.68, ICICI Bank declined 1.06% to $18.74, and Tata Motors sank 0.26% to $22.72. Vedanta added 2.3% to $15.84.

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