Asian Markets Weak, Tracking Wall Street

Asian stock markets are trading mostly weak on Thursday, following the broadly negative cues from Wall Street overnight, on renewed concerns over the outlook for interest rates and recession fear as disappointing US data showed a more than expected drop in retail sales and industrial production. Asian Markets closed mostly higher on Wednesday.

St. Louis US Fed President James Bullard also commented that the central bank needs to quickly hike interest rates above 5 percent, shelving much of the recent optimism over interest rates.

The Australian stock market is notably higher on Thursday, extending the slight gains in the previous session, with the benchmark S&P/ASX 200 moving above the 7,400 level to a nine-month high, despite the broadly negative cues from Wall Street overnight, with gains in miners partially offset by weakness in technology and energy stocks.

The benchmark S&P/ASX 200 Index is gaining 38.80 points or 0.53 percent to 7,432.20, after touching a high of 7,438.00 earlier. The broader All Ordinaries Index is up 35.30 points or 0.46 percent to 7,644.80. Australian stocks ended slightly higher on Wednesday.

Among major miners, Rio Tinto is gaining almost 2 percent, while Fortescue Metals and BHP Group are adding almost 1 percent. Mineral Resources is edging down 0.5 percent and OZ Minerals is flat.

BHP reported that second-quarter total iron ore production increased 1 percent to 66.90 million tonnes from the prior year. However, 2023 total iron ore production guidance remains unchanged.

Oil stocks are mostly lower. Beach energy is edging down 0.3 percent, Woodside Energy is losing almost 2 percent, Santos is slipping more than 2 percent and Origin Energy is down more than 1 percent.

In the tech space, Afterpay owner Block is losing more than 3 percent, Xero is slipping more than 1 percent, Zip is slipping more than 5 percent, Appen is declining almost 2 percent and WiseTech Global is down almost 1 percent.

Among the big four banks, Commonwealth Bank, ANZ Banking and Westpac are edging up 0.1 to 0.4 percent each, while National Australia Bank is edging down 0.1 percent.

Among gold miners, Northern Star Resources is edging up 0.3 percent, while Newcrest Mining and Evolution Mining are losing almost 1 percent each. Resolute Mining and Gold Road Resources are flat.

In the currency market, the Aussie dollar is trading at $0.690 on Thursday.

The Japanese stock market is significantly lower on Thursday, giving up some of the gains in the previous two sessions, with the Nikkei 225 falling below the 26,500 level, following the broadly negative cues from Wall Street overnight, with weakness across most sectors, led by financial and technology stocks.

Traders also digested domestic data that showed another trade deficit in December as import growth outpaced export growth.

The benchmark Nikkei 225 Index closed the morning session at 26,468.62, down 322.50 points or 1.20 percent, after hitting a low of 26,456.52 earlier. Japanese stocks closed sharply higher on Wednesday.

Market heavyweight SoftBank Group is losing more than 3 percent and Uniqlo operator Fast Retailing is down more than 1 percent. Among automakers, Toyota is losing more than 2 percent and Honda is declining almost 2 percent.

In the tech space, Screen Holdings is losing more than 1 percent and Tokyo Electron is declining almost 2 percent, while Advantest is edging up 0.2 percent.

In the banking sector, Mitsubishi UFJ Financial and Mizuho Financial are edging down 0.5 percent each, while Sumitomo Mitsui Financial is losing more than 1 percent.

Among the major exporters, Mitsubishi Electric is losing almost 1 percent and Canon is edging down 0.3 percent each, while Panasonic is edging up 0.1 percent and Sony is gaining almost 1 percent.

Among the other major losers, Mitsubishi Motors is losing more than 5.5 percent and Mazda Motor is down more than 4 percent, while Nissan Motor, Suzuki Motor, Fujikura, Olympus and Subaru are declining more than 3 percent each. TDK and Tokyu Fudosan Holdings are slipping almost 3 percent each.

Conversely, there are no other major gainers.

In the currency market, the U.S. dollar is trading in the lower 128 yen-range on Thursday.

Elsewhere in Asia, New Zealand, China, Hong Kong and Singapore are lower by between 0.2 and 0.6 percent each, while South Korea, Malaysia and Indonesia are higher by between 0.2 and 0.3 percent each. Taiwan is closed through January 30 for the Lunar New Year holidays.

On Wall Street, stocks saw initial strength during trading on Wednesday but moved sharply lower over the course of the session. The major averages all showed notable moves to the downside after ending Tuesday’s trading mixed.

The major averages fell to new lows for the session going into the close of trading. The Dow plunged 613.89 points or 01.8 percent to 33,296.96, the Nasdaq slumped 138.10 points or 1.2 percent to 10,957.01 and the S&P 500 tumbled 62.11 points or 1.6 percent to 3,928.86.

Meanwhile, the major European markets turned in a mixed performance on the day. While the French CAC 40 Index inched up by 0.1 percent, the German DAX Index closed just below the unchanged line and the U.K.’s FTSE 100 Index dipped by 0.3 percent.

Crude oil futures settled lower on Wednesday amid concerns about a possible U.S. recession. West Texas Intermediate Crude oil futures for February ended lower by $0.70 or 0.9 percent at $79.48 a barrel.

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