Asian Markets Track Global Markets Lower

Asian stock markets are trading mostly lower on Thursday, following the broadly negative cues from global markets overnight, reflecting lingering concerns about higher interest rates and the impact on the global economy as traders digested some hawkish comments from US Fed officials. The renewed COVID-19 induced curbs in China also weighed on market sentiment. Asian Markets closed mostly lower on Wednesday.

In a remark, Cleveland Federal Reserve President Loretta Mester said she expects the Fed to raise interest rates above 4 percent by early next year. Mester added that she does not anticipate the Fed cutting interest rates in 2023, with the central bank likely to keep rates at an elevated level in an effort to combat inflation.

Meanwhile, Eurozone inflation also hit a new record in August and added further pressure on the European Central Bank to tighten policy more aggressively as soon as next week, which could trigger a recession.

The Australian stock market is sharply lower on Thursday, extending the losses in the previous session, with the benchmark S&P/ASX 200 falling below the 6,900 level, following the broadly negative cues from global markets overnight, with weakness across most sectors, led by technology, materials and energy stocks.

The benchmark S&P/ASX 200 Index is losing 129.40 points or 1.85 percent to 6,857.40, after hitting a low of 6,836.50 earlier. The broader All Ordinaries Index is down 130.50 points or 1.81 percent to 7,095.60. Australian stocks ended modestly lower on Wednesday.

Among major miners, Mineral Resources is down almost 1 percent, OZ Minerals is losing almost 2 percent, Rio Tinto is slipping more than 1 percent and Fortescue Metals is declining more than 2 percent. BHP Group is sliding more than 7 percent as it trades ex-dividend.

Oil stocks are lower. Santos is losing more than 2 percent, Beach energy is declining more than 4 percent, Origin Energy is down almost 3 percent and Woodside Energy is slipping more that 1 percent.

In the tech space, Afterpay owner Block is losing more than 3 percent, Xero is down more than 2 percent, Appen is declining almost 2 percent and Zip is sliding almost 4 percent, while WiseTech Global is slipping more than 1 percent.

Among the big four banks, National Australia Bank, Westpac and Commonwealth Bank are losing almost 2 percent each, while ANZ Banking is down more than 1 percent.

Among gold miners, Resolute Mining and Gold Road Resources are losing almost 2 percent each, while Newcrest Mining is declining more than 3 percent, Northern Star Resources is slipping almost 4 percent and Evolution Mining is sliding more than 5 percent.

In economic news, the manufacturing sector in Australia continued to expand in August, albeit at a slower pace, the latest survey from S&P Global revealed on Thursday with a manufacturing PMI score of 53.8. That’s down from 55.7 in July, although it remains above the boom-or-bust line of 50 that separates expansion from contraction.

Building capex in Australia was down a seasonally adjusted 2.5 percent on quarter in the second quarter of 2022, the Australian Bureau of Statistics said on Thursday, coming in at A$17.220 billion. That follows the 0.6 percent decline in the previous three months. On a yearly basis, building capex rose 1.0 percent, equipment capex climbed 3.2 percent and overall capex gained 2.0 percent.

In the currency market, the Aussie dollar is trading at $0.681 on Thursday.

The Japanese stock market is sharply lower on Thursday, extending the losses in the previous session, with the Nikkei 225 falling more than 400 points to below the 27,700 level, following the broadly negative cues from global markets overnight, with the Yen dropping to a fresh 24-year low and threatening to breach the key psychological level of 140.

The benchmark Nikkei 225 Index closed the morning session at 27,673.14, down 418.39 points or 1.49 percent, after hitting a low of 27,606.22 earlier. Japanese stocks closed modestly lower on Wednesday.

Market heavyweight SoftBank Group is losing almost 2 percent and Uniqlo operator Fast Retailing is declining more than 2 percent. Among automakers, Honda is losing more than 2 percent and Toyota is down 2.5 percent.

In the tech space, Screen Holdings is losing more than 3 percent, Tokyo Electron is declining 2.5 percent and Advantest is slipping more than 4 percent.

In the banking sector, Mitsubishi UFJ Financial and Mizuho Financial are losing almost 1 percent each, while Sumitomo Mitsui Financial is edging down 0.4 percent.

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

Among the other major losers, Mitsui Mining & Smelting is losing almost 5 percent and Unitika is declining more than 4 percent, while Pacific Metals, Yokogawa Electric, Osaka Gas, Toto, Mitsubishi, BANDAI NAMCO and Marubeni are all down more than 3 percent each. Sumitomo Metal Mining, Denso, TDK and Itochu are declining almost 3 percent each.

Conversely, Sekisui House is gaining almost 5 percent, while Konami Group and Japan Steel Works are adding almost 3 percent each.

In economic news, the manufacturing sector in Japan continued to expand in August, albeit at a slower pace, the latest survey from Jibun Bank revealed on Thursday with a manufacturing PMI score of 51.5. That’s down from 52.1 in July, although it remains above the boom-or-bust line of 50 that separates expansion from contraction.

In the currency market, the U.S. dollar is trading in the mid-139 yen-range on Thursday.

Elsewhere in Asia, Taiwan and South Korea are down 1.7 and 1.6 percent, respectively. New Zealand, Hong Kong, Singapore, Malaysia and Indonesia are lower by between 0.1 and 0.9 percent each. China is bucking the trend and is up 0.1 percent.

On Wall Street, stocks came under pressure over the course of the trading day on Wednesday, extending the notable downward move seen in the past few sessions. The major averages showed a lack of direction early in the session but eventually slid firmly into negative territory.

The major averages saw further downside going into the close, ending the session at their worst levels of the day. The Dow slid 280.44 points or 0.9 percent to 31,510.43, the Nasdaq fell 66.93 points or 0.6 percent to 11,816.20 and the S&P 500 dropped 31.16 points or 0.8 percent to 3,955.00.

The major European markets all also moved to the downside on the day. While the French CAC 40 Index tumbled by 1.4 percent, the U.K.’s FTSE 100 Index and the German DAX Index slumped by 1.1 percent and 1.0 percent, respectively.

Crude oil prices saw further downside on Wednesday, extending recent losses on concerns about the outlook for the global economy after the Eurozone’s record high inflation report. West Texas Intermediate for October delivery tumbled $2.09 or 2.3 percent to $89.55 a barrel.

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