Asian Markets Mostly Lower Amid Rate Hikes

Asian stock markets are mostly lower on Friday, following the broadly negative cues from global markets overnight, as traders react to interest rate hikes by the Bank of England, the Norges Bank and the Swiss National Bank as well as inflation concerns that triggered growth worries. US Fed Chair Jerome Powell also reiterated plans to continue raising interest rates during his second day of testimony on Capitol Hill. Asian markets ended mixed on Thursday.

Powell made it clear that inflationary pressures continue to run high and the fight against inflation has “a long way to go.” CME Group’s FedWatch Tool currently indicates a 74.4% chance the Fed will raise rates by another quarter point following its next meeting in late July.

The Australian stock market is significantly lower on Friday, extending the losses in the previous two sessions, with the benchmark S&P/ASX 200 falling to just above the 7,100 level, following the broadly negative cues from global markets overnight, with weakness across most sectors, led by energy and financial stocks. Traders digested data that showed a slowdown in Australian manufacturing activity and services activity.

The benchmark S&P/ASX 200 Index is losing 76.90 points or 1.07 percent to 7,118.60, after hitting a low of 7,111.90 earlier. The broader All Ordinaries Index is down 75.90 points or 1.03 percent to 7,305.10. Australian markets ended sharply lower on Thursday.

Among major miners, Mineral Resources and Rio Tinto are edging down 0.4 to 0.5 percent each, while BHP Group is losing almost 1 percent. Fortescue Metals is declining 1.5 percent.

Oil stocks are mostly lower. Santos and Beach energy are losing almost 3 percent each, while Woodside Energy is down more than 2 percent and Origin Energy is edging down 0.4 percent.

Among tech stocks, Afterpay owner Block is losing more than 1 percent, Appen is edging down 0.4 percent and Xero is down almost 1 percent, while, Zip is adding more than 1 percent and WiseTech Global is edging up 0.2 percent.

Among the big four banks, Commonwealth Bank, Westpac, ANZ Banking and National Australia Bank are all losing almost 1 percent each.

Gold miners are mixed. Gold Road Resources is losing more than 5 percent, while Northern Star Resources and Newcrest Mining are edging down 0.2 to 0.3 percent each. Resolute Mining is gaining more than 1 percent and Evolution Mining is adding almost 1 percent.

In economic news, the manufacturing sector in Australia continued to contract in June, albeit at a slower pace, the latest survey from Judo Bank revealed on Friday with a manufacturing PMI score of 48.6. That’s up from 48.4 in May, although it remains beneath the boom-or-bust line of 50 that separates expansion from contraction. The survey also showed that the services PMI fell from 52.1 in May to 50.7 in June, while the composite index slipped from 51.6 in May to 50.5 in June.

In the currency market, the Aussie dollar is trading at $0.671 on Friday.

The Japanese stock market is sharply lower on Friday after opening in the green, extending the losses in the previous session, with the benchmark Nikkei 225 falling below the 32,800 level, following the broadly negative cues from global markets overnight, with weakness across most sectors partially offset by gains in technology stocks.

The benchmark Nikkei 225 Index closed the morning session at 32,722.33, down 542.55 points or 1.63 percent, after hitting a low of 32,693.57 earlier. Japanese stocks closed significantly lower on Thursday.

Market heavyweight SoftBank Group is losing almost 1 percent, while Uniqlo operator Fast Retailing is down more than 1 percent. Among automakers, Honda is losing almost 1 percent and Toyota is also down almost 1 percent.

In the tech space, Advantest and Screen Holdings are gaining almost 1 percent each, while Tokyo Electron is adding more than 1 percent.

In the banking sector, Mitsubishi UFJ Financial is losing more than 1 percent, while Mizuho Financial and Sumitomo Mitsui Financial are edging down 0.2 percent each.

Among major exporters, Canon, Sony and Mitsubishi Electric are losing more than 1 percent each, while Panasonic is edging down 0.4 percent.

Among other major losers, Mitsui & Co. losing almost 5 percent, while BANDAI NAMCO Holdings, Fujikura and Mitsubishi Corp. are down more than 4 percent each. Ebara, Itochu, Trend Micro, Mitsubishi Heavy Industries, IHI and Sojitz are declining almost 4 percent each, while Marubeni, Kobe Steel, Sumitomo Metal Mining, Sumitomo and CyberAgent are slipping more than 3 percent each.

Conversely, Tokyo Electric Power is surging almost 6 percent.

In economic news, overall consumer prices in Japan were up 3.2 percent on year in May, the Ministry of Internal Affairs and Communications said on Friday. That was well shy of estimates for 4.1 percent and down from 3.5 percent in April. On a monthly basis, consumer prices rose 0.1 percent – slowing from 0.6 percent a month earlier.

Core CPI, which excludes the volatile prices of food, also rose an annual 3.2 percent – compared to expectations for an increase of 3.1 percent and down from 3.4 percent in the previous month.

In the currency market, the U.S. dollar is trading in the lower 143 yen-range on Friday.

Elsewhere in Asia, Hong Kong is down 1.8 percent, while Singapore and South Korea are lower by 0.7 percent each. New Zealand is down 0.1 percent, while Malaysia is up 0.1 percent. Indonesia is relatively flat. China and Taiwan remain closed for the Dragon Boat Festival.

On Wall Street, stocks turned in a lackluster performance for much of the trading session on Thursday but managed to end the day mostly higher. Technology stocks helped lead the advance, resulting in a surge by the tech-heavy Nasdaq.

The Nasdaq saw further upside going into the close, jumping 128.41 points or 1.0 percent to 13,630.61. The S&P 500 also climbed 16.20 points or 0.4 percent to 4,381.89, while the narrower Dow edged down 4.81 points or less than a tenth of a percent to 33,946.71.

Meanwhile, the major European markets all moved to the downside on the day. While the German DAX Index edged down by 0.2 percent, the U.K.’s FTSE 100 Index and the French CAC 40 Index both fell by 0.8 percent.

Crude oil prices fell sharply Thursday as interest rate hikes and inflation concerns raised concerns about the outlook for fuel demand, while a stronger greenback also weighed. West Texas Intermediate Crude oil futures for August ended lower by $3.02 or 4.1 percent at $69.51 a barrel.

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