Asian Markets Mostly Higher Amid Cautious Trades

Asian stock markets are trading mostly higher on Thursday, following the positive cues overnight from Wall Street, on higher crude oil prices and continued economic optimism as the country continues to reopen following increased Covid-19 vaccination rates and relaxed social distancing measures.

Buying interest remained subdued as investors await the U.S. Labor Department’s closely watched monthly jobs report on Friday, which could offer cues on the economic recovery. Asian markets closed mixed on Wednesday.

Investors are also cautious and refraining from making major moves amid the high coronavirus cases in most markets in the region. The efforts to control the pandemic are also leading to restrictions and lockdowns is several areas in the region.

The Australian stock market is modestly higher on Thursday, extending the gains of the previous session, with the benchmark S&P/ASX 200 above the 7,200 level at fresh all-time highs, following the positive cues overnight from Wall Street, faster than expected local GDP growth and improved oil prices.

Meanwhile, traders remain concerned about the rising COVID-19 infection cases in the country’s second-most populous state of Victoria, with the lockdown extended by a week across Melbourne to contain the infection rate. The outbreak in Victoria has reached a count of 69 active cases, with three new locally acquired cases.

The Australian Treasury is also mulling disaster payment to Victorians impacted by the lockdown, similar to Commonwealth cash distributed after fires and floods.

The benchmark S&P/ASX 200 Index is gaining 30.50 points or 0.42 percent to 7,248.30, after touching an all-time high to 7,281.80 earlier. The broader All Ordinaries Index is up 30.40 points or 0.41 percent to 7,499.30. Australian markets ended notably higher on Wednesday.

Among major miners, BHP Group, Fortescue Metals and OZ Minerals are flat, while Rio Tinto is edging down 0.4 percent. Mineral Resources is adding almost 1 percent.

Oil stocks are higher after crude oil prices climbed overnight. Oil Search, Woodside Petroleum, Beach Energy and Santos are all gaining almost 3 percent each, while Origin Energy is adding more than 4 percent.

Among Tech stocks, Appen and Xero are gaining almost 1 percent each, while WiseTech Global and Afterpay are edging up 0.4 percent each.

Among the big four banks, Westpac is gaining almost 1 percent, while National Australia Bank, ANZ Banking and Commonwealth Bank are adding more than 1 percent each.

Among gold miners, Evolution Mining and Newcrest Mining are edging down 0.2 percent each, while Northern Star Resources is edging up 0.5 percent. Gold Road Resources and Resolute Mining are losing almost 2 percent each.

In other news, shares in Sezzle are soaring more than 14 percent after it signed a three-year agreement with retail giant Target to provide buy now, pay later (BNPL) services in store and online, saying it would give Target customers access to interest-free payment plans.

In economic news, the services sector in Australia continued to expand in May, albeit at a slightly slower pace, the latest survey from Markit Economics showed on Thursday, with a services PMI score of 58.0. That’s down from 58.8 in April, although it remains well above the boom-or-bust line of 50 that separates expansion from contraction. Also, the composite index fell to 58.0 in May from 58.9 in April.

The latest survey from the Australian Industry Group showed on Thursday that the construction sector in Australia continued to expand in May, albeit at a slightly slower pace, with a seasonally adjusted Performance of Construction Index score of 58.3. That’s down from 59.1 in April, although it remains well above the boom-or-bust line of 50 that separates expansion from contraction.

In the currency market, the Aussie dollar is trading at $0.774 on Thursday.

The Japanese stock market is modestly higher on Thursday, extending the gains of the previous session, with the benchmark Nikkei 225 breaking back above the 29,000 mark, following the positive cues overnight from Wall Street.

Meanwhile, traders remain concerned after the Japanese government extended the COVID-19 state of emergency in Tokyo, Osaka and seven other prefectures to contain the spread of the highly contagious variants of the virus, though the daily infection rates are steadily declining since it peaked in mid-May.

The benchmark Nikkei 225 Index closed the morning session at 20,048.28, up 102.14 points or 0.35 percent, after touching a high of 29,157.16 in early deals. Japanese shares ended modestly higher on Wednesday.

Market heavyweight SoftBank Group is gaining more than 2 percent, while Uniqlo operator Fast Retailing is down almost 5 percent. Among automakers, Toyota is gaining more than 2 percent and Toyota is adding almost 3 percent, while Mazda is losing more than 2 percent.

In the tech space, Advantest is gaining more than 4 percent, while Screen Holdings and Tokyo Electron are adding more than 1 percent each. In the banking sector, Sumitomo Mitsui Financial is gaining almost 1 percent and Mizuho Financial is edging up 0.4 percent, while Mitsubishi UFJ Financial is flat.

The major exporters are mostly higher. Mitsubishi Electric and Panasonic are edging up 0.4 percent each, while Sony is gaining almost 1 percent and Canon is adding more than 1 percent.

Among the other major gainers, Casio Computer is gaining almost 6 percent, Sumitomo Dainippon Pharma is up almost 5 percent and Japan Steel Works is adding more than 4 percent, while Ajinomoto and East Japan Railway are rising almost 4 percent each. IHI, Credit Saison and Mitsui Chemicals are up more than 3 percent each, while Daiichi Sankyo, Sapporo Holdings, Yokohama Rubber, Nippon Suisan Kaisha and Keisei Electric Railway are gaining almost 3 percent each.

Conversely, Denka is losing more than 6 percent, CyberAgent is down almost 3 percent, Sinsei Bank is declining more than 2 percent and Nexon is losing almost 2 percent. Kawasaki Kisen Kaisha, Toyo Seikan, TDK, Nippon Yusen, Sumitomo Metal Mining, Citizen Watch, Mitsui OSK Lines and Z Holdings are all down more than 1 percent each.

In economic news, the services sector in Japan continued to contract in May, and at a faster pace, the latest survey from Jibun Bank revealed on Thursday, with a services PMI score of 46.5. That’s up from 49.5 in April and it moves further beneath the boom-or-bust line of 50 that separates expansion from contraction. The survey also said its composite index slipped to 48.8 in May from 51.0 in April.

In the currency market, the U.S. dollar is trading in the higher 109 yen-range on Thursday.

Elsewhere in Asia, New Zealand, Taiwan, China, South Korea and Singapore are higher by between 0.1 and 0.7 percent. Meanwhile, Hong Kong, Indonesia and Malaysia are lower by between 0.1 and 0.3 percent.

On Wall Street, stocks moved to the upside in early trading on Wednesday, largely mirroring the performance seen in the previous session, but showed a lack of direction for much of the rest of the day. The major averages once again finished the day near the unchanged line.

A late move to the upside helped the major averages close modestly higher. The Dow inched up 25.07 points or 0.1 percent to 34,600.38, the Nasdaq edged up 19.85 points or 0.1 percent to 13,756.33 and the S&P 500 crept up 6.08 points or 0.1 percent to 4,208.12.

The major European markets all also moved to the upside on the day. While the German DAX Index edged up by 0.2 percent, the U.K.’s FTSE 100 Index and the French CAC 40 Index rose by 0.4 percent and 0.5 percent, respectively.

Crude oil prices rose sharply on Wednesday, extending gains from the previous session, amid rising hopes about a pickup in energy demand and on the decision by OPEC to gradually increase crude production. West Texas Intermediate Crude oil futures for July ended up $1.11 or 1.6 percent at $68.83 a barrel, the highest since October 2018.

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