Asian Markets Track Wall Street Lower

Asian stock markets are trading mostly lower on Friday, following the broadly negative cues from Wall Street overnight, as the markets remain concerned over the outlook for interest rates amid the prospect of further policy tightening from the US Fed as part of its commitment to reign in stubborn inflation. Recent hawkish comments by some Fed officials are also weighing on the markets. Asian markets ended mixed on Thursday.

A slew of Fed officials suggested U.S. interest rates would keep climbing for some time to cool inflation.

Traders are also reacting to U.S. President Joe Biden’s State of the Union address where he warned the U.S. would act to protect itself should China threaten its sovereignty.

The Australian stock market is notably lower on Friday, extending the losses in the previous session, with the benchmark S&P/ASX 200 staying below the 7,500 level, following the broadly negative cues from Wall Street overnight, with losses across most sectors, led by technology and energy stocks as well as coal and gold mining stocks.

The benchmark S&P/ASX 200 Index is losing 44.50 points or 0.59 percent to 7,445.80, after hitting a low of 7,428.80 earlier. The broader All Ordinaries Index is down 51.70 points or 0.67 percent to 7,644.10. Australian markets ended notably lower on Thursday.

Among major miners, BHP Group, OZ Minerals and Rio Tinto are flat, while Fortescue Metals is edging down 0.5 percent and Mineral Resources is losing 1.5 percent.

The market is also seeing heavy losses among coal miners, with Whitehaven Coal losing 4.5 percent, New Hope Corp sliding more than 7 percent and Yancoal Australia declining almost 7 percent.

Oil stocks are weak. Beach energy is losing more than 2 percent and Woodside Energy is declining more than 1 percent, while Origin Energy and Santos are down almost 1 percent each.

Among tech stocks, Afterpay owner Block is slipping almost 6 percent, WiseTech Global is losing 3.5 percent, Zip is declining almost 4 percent and Xero is down almost 2 percent, while Appen is soaring 9.5 percent.

Among the big four banks, ANZ Banking is losing almost 1 percent and National Australia Bank is down more than 1 percent, while Westpac and Commonwealth Bank are edging down 0.5 percent each.

Gold miners are lower. Northern Star Resources is losing more than 2 percent, Gold Road Resources is slipping more than 3 percent, Evolution Mining is declining almost 3 percent and Newcrest Mining is down almost 1 percent, while Resolute Mining is gaining more than 1 percent.

In the currency market, the Aussie dollar is trading at $0.692 on Friday.

The Japanese stock market is significantly higher on Friday, recouping some of the losses in the previous three sessions, with the benchmark Nikkei 225 moving above the 27,700 level, despite the broadly negative cues from Wall Street overnight, lifted by upbeat domestic earnings and solid outlooks reported by some major heavyweight companies.

The benchmark Nikkei 225 Index closed the morning session at 27,722.92, up 138.57 points or 0.50 percent, after touching a high of 27,814.02 earlier. Japanese stocks closed slightly lower on Thursday.

Market heavyweight SoftBank Group is losing almost 1 percent, while Uniqlo operator Fast Retailing is edging up 0.2 percent. Among automakers, Honda is edging down 0.2 percent and Toyota is losing more than 1 percent.

In the tech space, Advantest is gaining almost 2 percent, Tokyo Electron is surging almost 5 percent and Screen Holdings is adding more than 3 percent.

In the banking sector, Mizuho Financial is gaining 1.5 percent, Mitsubishi UFJ Financial is adding more than 2 percent and Sumitomo Mitsui Financial is up almost 2 percent.

Among major exporters, Panasonic and Canon are edging up 0.2 to 0.3 percent each, while Mitsubishi Electric is gaining almost 2 percent. Sony is flat.

Among the other major gainers, Kobe Steel is skyrocketing 15 percent, Dai Nippon Printing is soaring more than 13 percent, Tokai Carbon is surging more than 9 percent and Toppan is gaining 7.5 percent, while Sumitomo Osaka Cement and Nippon Sheet Glass are adding more than 5 percent each. Nippon Steel is up almost 5 percent, NEXON is rising more than 4 percent and Credit Saison is gaining 3.5 percent, while Concordia Financial, Taiheiyo Cement, T&D Holdings and Terumo are adding almost 3 percent each.

Conversely, NTT Data is losing 5.5 percent, Fujikura is down more than 4 percent and Mitsubishi Estate is declining almost 4 percent.

In economic news, producer prices in Japan were flat on month in January, the Bank of Japan said on Friday. That was shy of expectations for an increase of 0.3 percent and down from the upwardly revised 0.7 percent gain in December (originally 0.5 percent). On a yearly basis, producer prices jumped 9.5 percent – again missing forecasts for 9.6 percent following the upwardly revised 10.5 percent spike in the previous month (originally 10.2 percent).

In the currency market, the U.S. dollar is trading in the higher 131 yen-range on Friday.

Elsewhere in Asia, Hong Kong is down 1.1 percent, while China, Singapore, South Korea, Taiwan and Indonesia are lower by between 0.1 and 0.8 percent each. New Zealand and Malaysia are up 0.1 and 0.4 percent, respectively.

On Wall Street, stocks showed a significant downturn over the course of the trading session on Thursday after failing to sustain an initial move to the upside. The major averages pulled back well off their early highs and into negative territory.

The major averages climbed off their worst levels going into the close but remained firmly in the red. The Dow fell 249.13 points or 0.7 percent to 33,699.88, the Nasdaq slumped 120.94 points or 1.0 percent to 11,789.58 and the S&P 500 slid 36.36 points or 0.9 percent to 4,081.50.

Meanwhile, the major European markets all moved to the upside on the day. While the French CAC 40 Index jumped by 1.0 percent, the German DAX Index advanced by 0.7 percent and the U.K.’s FTSE 100 Index rose by 0.3 percent.

Crude oil futures ended lower Thursday as rising crude inventories in the U.S. and prospects of more interest rate hikes by the Federal Reserve weighed on oil prices. West Texas Intermediate Crude oil futures for March ended lower by $0.41 or 0.5 percent at $78.06 a barrel.

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