Asian Markets Trade Mostly Lower

Asian stock markets are trading mostly lower on Wednesday, following the broadly negative cues overnight from Wall Street, weighed down by weak crude oil prices, concerns about inflation and geopolitical tensions. Traders also were concerned about the outlook for monetary policy following comments from Federal Reserve Governor Lael Brainard. Asian Markets closed mostly higher on Tuesday.

Brainard described inflation as much too high during remarks at a Minneapolis Fed conference and predicted the Fed would start reducing its balance sheet at a “rapid pace” as soon as the May meeting.

The Fed may provide additional clues about the outlook for monetary policy with the release of the minutes of its March meeting later in the day as traders look for further clues about how aggressively the central bank plans to tighten policy.

Concerns about the economic impact of the ongoing war in Ukraine and looming increased sanctions on Russia following alleged atrocities by the Russian troops in Ukraine also weighed on sentiment. U.S. President Joe Biden called Russian President Vladimir Putin a war criminal and sought additional sanctions on Russia.

The U.S. is likely to announce new sanctions on Russia this week. Meanwhile, the 27-member EU is under pressure to extend sanctions to Russia’s oil and coal sectors to condemn its war crimes in Ukraine.

The Australian stock market is sharply lower on Wednesday, recouping the gains in the previous two sessions, with the benchmark S&P/ASX 200 staying above the 7,400 level, following the broadly negative cues overnight from Wall Street, with weakness across most sectors, particularly materials and technology, on the back of tumbling commodity prices.

The benchmark S&P/ASX 200 Index is losing 50.60 points or 0.67 percent to 7,477.30, after hitting a low of 7,437.50 earlier. The broader All Ordinaries Index is down 56.40 points or 0.72 percent to 7,776.80. Australian stocks ended slightly higher on Tuesday.

Among major miners, OZ Minerals is losing almost 3 percent and Mineral Resources is down almost 1 percent, while Rio Tinto, Fortescue Metals and BHP Group are declining almost 2 percent each.

Oil stocks are weak. Origin Energy is edging down 0.3 percent and Woodside Petroleum is declining more than 1 percent, while Santos and Beach energy are losing almost 2 percent each.

In the tech space, WiseTech Global is losing more than 2 percent, Xero is declining almost 3 percent, Block is plunging more than 6 percent, Appen is down more than 3 percent and Zip is declining almost 5 percent.

Among the big four banks, ANZ Banking and Commonwealth Bank are edging up 0.1 percent each, while National Australia Bank are edging down 0.2 percent. Westpac is flat.

Among gold miners, Gold Road Resources, Evolution Mining, Northern Star Resources and Newcrest Mining are all losing more than 2 percent each, while Resolute Mining is slipping 1.5 percent.

In the currency market, the Aussie dollar is trading at $0.757 on Wednesday.

The Japanese stock market is sharply lower on Wednesday, giving up the gains in the previous two sessions, with the Nikkei 225 dropping 500 points to be below the 27,300 mark, following the broadly negative cues overnight from Wall Street, and as traders digest the hawkish comments from the Federal Reserve on interest rate outlook. Technology stocks led the losses as it mirrored its peers on Nasdaq.

The escalation in the Russia-Ukraine conflict and the prospects of increasing stringent sanctions to be imposed on Russia by the Western countries rendered the mood cautious.

The benchmark Nikkei 225 Index closed the morning session at 27,262.05, down 525.93 points or 1.89 percent, after hitting a low of 27,284.03 earlier. Japanese stocks closed slightly higher on Tuesday.

Market heavyweight SoftBank Group is losing more than 2 percent and Uniqlo operator Fast Retailing is edging down 0.5 percent. Among automakers, Honda is losing almost 1 percent and Toyota is declining more than 1 percent.

In the tech space, Screen Holdings and Tokyo Electron are losing more than 3 percent each, while Advantest is declining almost 4 percent.

In the banking sector, Mizuho Financial is gaining almost 1 percent, Mitsubishi UFJ Financial is adding more than 1 percent and Sumitomo Mitsui Financial is edging up 0.4 percent.

Among the major exporters, Mitsubishi Electric is losing more than 2 percent, Sony is declining almost 4 percent, Panasonic is down almost 3 percent and Canon is slipping almost 1 percent.

Among the other major losers, Denso is losing almost 4 percent, while Yamaha Motor, Taiyo Yuden, Nippon Yusen K.K., Teijin, Japan Steel Works and Kawasaki Kisen Kaisha are declining more than 3 percent each. Kawasaki Heavy Industries, CyberAgent, Daikin Industries and Amada are down almost 3 percent each.

Conversely, Idemitsu Kosan is losing almost 4 percent, while Nikon, Chiba Bank and Dai-ichi Life are declining more than 2 percent each.

In the currency market, the U.S. dollar is trading in the higher 123 yen-range on Wednesday.

Elsewhere in Asia, Hong Kong is plunging 1.9 percent, while New Zealand, China, Singapore, South Korea, Indonesia and Taiwan are lower by between 0.3 and 0.9 percent each. Malaysia is bucking the trend and is up 0.3 percent.

On Wall Street, stocks moved significantly lower over the course of the trading day on Tuesday, offsetting the upward move seen over the two previous sessions. The major averages all moved to the downside, with the tech-heavy Nasdaq posting a particularly steep loss.

Selling pressure intensified in the final hour of trading, dragging the major averages down to new lows for the session. While the Nasdaq plunged 328.39 points or 2.3 percent to 14,204.17, the S&P 500 tumbled 57.52 points or 1.3 percent to 4,525.12 and the Dow slid 280.70 points or 0.8 percent to 34,641.18.

The major European markets turned in a mixed performance on the day. The U.K.’s FTSE 100 climbed 0.72 percent, while Germany’s DAX and France’s CAC 40 slid 0.65 percent and 1.28 percent, respectively.

Crude oil futures pared early gains and drifted lower on Tuesday amid concerns about the outlook for energy demand due to a surge in coronavirus cases in China. West Texas Intermediate Crude oil futures for May ended down by $1.32 or about 1.3 percent at $101.96 a barrel, after having climbed above $105.00 a barrel earlier in the day.

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