Asian Markets Mostly Lower
Asian stock markets are mostly lower on Wednesday following negative cues overnight from Wall Street on sinking crude oil prices and renewed coronavirus concerns due to extension of lockdown measures in several countries in Europe, particularly in Germany, and the sluggish vaccination campaign in the region. The sanctions between China and the West also rattled investors. Asian markets closed mostly lower on Tuesday.
Meantime, traders are also cautious after US Federal Reserve Chair Jerome Powell told Congress on Tuesday that a recovery in the US economy is far from complete and more must be done to limit the economic damage caused by COVID-19. US Treasury Secretary Janet Yellen also mentioned that while there are signs of recovery in the US, the nation is still down nearly 10 million jobs from its pre-pandemic peak.
The Australian stock market is modestly higher on Wednesday, with the benchmark S&P/ASX 200 just below the 6,800 level, despite the negative cues overnight from Wall Street. Gains in the technology stocks were slightly offset by weakness in materials and energy stocks amid weak commodity prices.
The benchmark S&P/ASX 200 Index is gaining 27.00 points or 0.40 percent to 6,772.40, after falling to a low of 6,735.60 earlier. The broader All Ordinaries Index is higher by 21.80 points or 0.31 percent to 7,008.40. Australian stocks gave up early gains to end slightly lower on Tuesday.
Among major miners, BHP Group is edging up 0.2 percent and Rio Tinto is up almost 1 percent, while Fortescue Metals is edging down 0.5 percent.
In the tech space, Appen and Afterpay are adding up more than 1 percent each, while WiseTech Global is gaining more than 2 percent.
Among the big four banks, ANZ Banking and National Australia Bank are flat, while Westpac is down almost 1 percent. Commonwealth Bank is gaining more than 1 percent.
The Reserve Bank of New Zealand has ordered Westpac to conduct independent reviews and hold additional liquid assets, due to problems with its risk governance and liquidity risk management.
Gold miners are lower after the gold price tumbled. Evolution Mining and Northern Star Resources are edging down 0.5 percent each, while Newcrest Mining is losing more than 1 percent.
Oil stocks are also lower after crude oil prices sank overnight. Oil Search is declining almost 3 percent, while Woodside Petroleum and Santos are down almost 1 percent each.
Santos has been awarded a major contract for the construction, connection, and operation of the floating production and storage offtake vessels for its Barossa joint venture LNG project, planned north of Darwin.
Among the companies paying dividends are stock exchange operator ASX Ltd, iron ore giant Fortescue Metals Group Ltd. and healthcare company Sonic Healthcare Ltd.
Shares in Airtasker are soaring almost 36 percent on debut after the online marketplace said it can meet or beat the full-year guidance it provided in the prospectus.
Shares in Clinvuel Pharmaceuticals are declining 2.4 percent after the biotech company confirmed the expansion of research on its major product which can help repair skin cells damaged by UV rays.
Computershare was in a trading halt after the stock transfer firm announced plans to spend US$750 million to buy Wells Fargo’s Corporate Trust Services (CTS) to help it leapfrog to be the fourth-largest corporate trust provider in the U.S. from eighth.
In economic news, the manufacturing sector in Australia continued to expand in March, and at a slightly faster pace, the latest survey from Markit Economics showed on Wednesday with a manufacturing PMI score of 57.0. That’s up from 56.9 in February and it moves further above the boom-or-bust line of 50 that separates expansion from contraction. Australia’s services PMI came in at 56.2, up sharply from 53.4 in February, while the composite index had a score of 56.2 – up from 53.7 in the previous month.
In the currency market, the Aussie dollar is trading at $0.760 on Wednesday.
The Japanese stock market is sharply lower on Wednesday, with the benchmark Nikkei index down more than 500 points to crash below 28,500 level, following negative cues overnight from Wall Street as weak crude oil and gold prices weighed on the market. The broad weakness in the market due to energy and financial is partially offset by strength in technology stocks.
The benchmark Nikkei 225 Index closed the morning session at 28,465.86, down 530.06 points or 1.83 percent, after hitting a low of 28,438.99 in earlier. Japanese stocks gave up early gains to end notably lower on Tuesday.
Market heavyweight SoftBank Group is declining almost 4 percent, while Uniqlo operator Fast Retailing is down more than 2 percent. Among automakers, Honda is losing more than 1 percent and Toyota is down almost 2 percent.
In the tech space, Tokyo Electron is adding almost 5 percent, Advantest is edging up 0.6 percent and Screen Holdings is adding more than 1 percent. In the banking sector, Sumitomo Mitsui Financial is losing more than 4 percent and Mitsubishi UFJ Financial is declining more than 5 percent.
The major exporters Panasonic is down almost 2 percent and Mitsubishi Electric is declining more than 1 percent, while Canon and Sony are losing almost 3 percent each.
Shares in Nikon are soaring almost 10 percent after its CFO Muneaki Tokunari said the company is expected to be fully in the black by the next fiscal year and that it will push to release 12 lenses in the next 12 months.
Among the other major gainers, AGC and Sumco are adding almost 2 percent each.
Conversely, Unitika, ANA Holdings, Nippon Yusen and Mitsui OSK Lines are all losing more than 7 percent each, while Inpex is down almost 7 percent. Isetan Mitsukoshi, Mitsui E&S Holdings, Aozora Bank, Futuoka Financial and Hino Motors are declining almost 6 percent each. Dentsu Group, Nippon Steel, West Japan Railway and Mazda Motors are losing more than 5 percent each.
In economic news, the manufacturing sector in Japan continued to expand in March, and at a slightly faster pace, the latest survey from Jibun Bank showed on Wednesday, with a manufacturing PMI score of 52.0. That’s up from 51.4 in February and it moves further above the boom-or-bust line of 50 that separates expansion from contraction. Japan’s services PMI came in at 46.5, up from 45.8 in February, while the composite index had a score of 48.3 – up from 48.2 in the previous month.
Additionally, members of the Bank of Japan’s monetary policy board said that it will maintain stimulus in the face of the Covid-19 crisis as long as necessary, minutes from the bank’s meeting on January 20 and 21 revealed on Wednesday. The board said that the Japanese economy is on a modest upswing and that trend is expected to continue – although some issues remain.
At the meeting, the central bank decided to maintain its monetary policy unchanged but raised the growth projections, citing the impetus from the fiscal stimulus measures. The board voted 7-1 to retain the interest rate at -0.1 percent.
In the currency market, the U.S. dollar is trading in the higher 108 yen-range on Wednesday.
Elsewhere in Asia, Hong Kong is plunging 1.7 percent, while South Korea, China, Taiwan, Malaysia, Singapore, and Indonesia are all lower by between 0.1 and 0.8 percent. However, New Zealand is bucking the trend and is edging up 0.2 percent in choppy trading.
On Wall Street, stocks showed a lack of direction throughout much of the trading day on Tuesday but showed a notable move to the downside in the latter part of the session. The major averages all slid firmly into negative territory.
The major averages ended the session near their worst levels of the day. The Dow slumped 308.05 points or 0.9 percent to 32,423.15, the Nasdaq tumbled 149.85 points or 1.1 percent to 13,227.70 and the S&P 500 slid 30.07 points or 0.8 percent to 3,910.52.
Meanwhile, the major European markets turned in a mixed performance on the day. While the German DAX Index closed just above the unchanged line, the French CAC 40 Index and the U.K.’s FTSE 100 Index both fell by 0.4 percent.
Crude oil prices tanked on Tuesday amid rising concerns about the outlook for energy demand due to the extension of lockdown measures in several parts of Europe. West Texas Intermediate Crude oil futures for May ended down $3.80 or 6.2 percent at $57.76 a barrel.
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