Asian Markets Lower After Wall Street Slump

Asian stock markets are trading mostly lower on Tuesday, following the broadly negative cues from Wall Street overnight, as traders continued to worry about the economic outlook ahead of next week’s US Federal Reserve monetary policy meeting. The new wave of COVID-19 infections in China also continues to hurt market sentiment amid supply and demand concerns. The Asian markets closed mostly higher on Monday.

The Australian stock market is slightly lower in a choppy session on Tuesday, giving up some of the gains in the previous session, with the benchmark S&P/ASX 200 staying below the 6,700 level, following the broadly negative cues from Wall Street overnight, dragged by plunging technology stocks, partially offset by strength in energy and materials stocks.

The benchmark S&P/ASX 200 Index is losing 16.30 points or 0.24 percent to 6,670.80, after hitting a low of 6,663.70 earlier. The broader All Ordinaries Index is down 13.50 points or 0.20 percent to 6.874.50. Australian stocks closed sharply higher on Monday.

Among the major miners, Rio Tinto is gaining more than 1 percent. BHP Group and OZ Minerals are adding almost 2 percent each, while Mineral Resources and Fortescue Metals are advancing more than 2 percent each.

Oil stocks are higher, with Beach energy gaining more than 4 percent, Santos adding almost 3 percent, Woodside Energy advancing almost 4 percent and Origin Energy up more than 2 percent.

Among tech stocks, Afterpay owner Block is losing more than 2 percent, WiseTech Global is plunging more than 4 percent, Xero is declining almost 4 percent, Zip is down more than 3 percent and Appen is slipping almost 3 percent.

Gold miners are weak. Newcrest Mining and Gold Road Resources are edging down 0.3 percent each, while Evolution Mining is losing more than 1 percent. Resolute Mining and Northern Star Resources are flat.

Among the big four banks, Commonwealth Bank is flat and ANZ Banking is still in a trading halt. Westpac is edging down 0.5 percent, while National Australia Bank is edging up 0.3 percent.

In other news, shares in JB Hi-Fi are up almost 3 percent after the electronics retailer reported record earnings and revenues for fiscal 2022 as shoppers returned to stores.

In economic news, members of the Reserve Bank of Australia’s Monetary Policy Board agreed that the country’s economy continues to weather the storm successfully in the aftermath of the chaos created by the COVID-19 pandemic, minutes from the bank’s July 5 meeting revealed on Tuesday. The members acknowledged that inflation has risen and is expected to continue to do so, the minutes showed, so further steps will be necessary to normalize monetary policy conditions.

At the meeting, the central bank also hiked its benchmark lending rate by 50 basis points, from 0.85 percent to 1.35 percent, citing the resilience of the economy and higher inflation. The bank also increased the interest rate on Exchange Settlement balances by 50 basis points to 1.25 percent.

In the currency market, the Aussie dollar is trading at $0.683 on Tuesday.

The Japanese stock market is significantly higher on Tuesday after a long weekend, extending the gains in the previous three sessions, with the Nikkei 225 moving above the 27,000 mark, despite the broadly negative cues from Wall Street overnight, with gains across all sectors, particularly financial and technology stocks.

Trader are cautiously looking ahead to the Bank of Japan’s policy meeting on Wednesday and Thursday, which is expected to keep its ultra-loose policy in place amid concerns the yen’s decades-low weakness will add to the cost of imported commodities and widen the country’s trade deficit.

The benchmark Nikkei 225 Index closed the morning session at 26,977.37, up 188.90 points or 0.71 percent, after touching a high of 27,043.58 earlier. Japanese shares ended modestly higher on Friday and the market was closed on Monday.

Market heavyweight SoftBank Group is edging up 0.5 percent and Uniqlo operator Fast Retailing is gaining more than 1 percent. Among automakers, Honda is gaining 1.5 percent and Toyota is edging up 0.5 percent.

In the tech space, Advantest and Tokyo Electron are gaining almost 1 percent each, while Screen Holdings is adding more than 2 percent. In the banking sector, Mitsubishi UFJ Financial, Mizuho Financial and Sumitomo Mitsui Financial are gaining almost 2 percent each.

The major exporters are strong, with Sony gaining almost 3 percent and Mitsubishi Electric edging up 0.5 percent, while Panasonic and Canon are adding almost 1 percent each.

Among the other major gainers, Kawasaki Kisen Kaisha is surging almost 6 percent, while Inpex and Kawasaki Heavy Industries are gaining more than 4 percent each. Kikkoman is adding almost 4 percent, while IHI Corp., Sumitomo Metal Mining, Mitsui O.S.K. Lines, Hitachi Construction Machinery, JGC Holdings, Nippon Yusen K.K. and Pacific Metals are all up more than 3 percent each.

Conversely, Daiichi Sankyo is losing almost 4 percent and Kansai Electric Power is down more than 3 percent.

In the currency market, the U.S. dollar is trading in the lower 138 yen-range on Tuesday.

Elsewhere in Asia, Hong Kong is down 1.2 percent, while New Zealand, China, Singapore, South Korea, Malaysia and Taiwan are lower by between 0.1 and 0.6 percent each. Indonesia is bucking the trend and is up 0.7 percent.

On Wall Street, stocks showed a strong move to the upside in early trading on Monday but saw a substantial downturn over the course of the session. The major averages pulled back well off their early highs and into negative territory.

After surging by more than 350 points early in the session, the Dow fell 215.65 points or 0.7 percent to 31,072.61. The Nasdaq also slumped 92.37 points or 0.8 percent to 11,360.05, while the S&P 500 slid 32.31 points or 0.8 percent to 3,830.85.

Meanwhile, the major European markets moved to the upside on the day. While the While the German DAX Index climbed by 0.7 percent, the U.K.’s FTSE 100 Index and the French CAC 40 Index both advanced by 0.9 percent.

Crude oil prices rose sharply Monday with traders assessing crude supply levels amid concerns over gas supply from Russia. A weak dollar also contributed significantly to the jump in oil prices. West Texas Intermediate crude oil futures for August ended higher by $5.01 or 5.1 percent at $102.60 a barrel.

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