Asian Markets Trading Mostly Higher On Fed Comments

Asian stock markets are trading mostly higher on Thursday, following the broadly positive cues overnight from Wall Street, as traders reacted positively to the Federal Reserve’s monetary policy announcement. Along with the plan to begin reducing its asset purchases, the Fed also announced its widely expected decision to keep the target range for the federal funds rate at 0 to 0.25 percent. Asian markets closed mostly lower on Wednesday.

In the statement announcing the decision, the Fed said indicators of economic activity and employment have continued to strengthen amid progress on Covid-19 vaccinations and strong policy support.

However, the weakness from crude oil and the coronavirus situation in the region are limiting the upside.

The Australian stock market is modestly higher on Thursday, extending the gains in the previous session, with the benchmark S&P/ASX 200 back above the 7,400 level, following the broadly positive cues overnight from Wall Street, as traders reacted positively to the US Federal Reserve’s monetary policy announcement. However, the weakness from crude oil and the domestic coronavirus situation, particularly in Victoria, are limiting the upside.

Along with the plan to begin reducing its asset purchases, the Fed also announced its widely expected decision to keep the target range for the federal funds rate at 0 to 0.25 percent.

The benchmark S&P/ASX 200 Index is gaining 20.10 points or 0.27 percent to 7,412.80, after touching a high of 7,422.70 earlier. The broader All Ordinaries Index is up 21.40 points or 0.28 percent to 7,734.40. Australian markets ended significantly higher on Wednesday.

Among major miners, Rio Tinto, Fortescue Metals and OZ Minerals are losing more than 1 percent each, while Mineral Resources is down almost 1 percent. Meanwhile, BHP Group is edging up 0.3 percent.

Oil stocks are lower. Origin Energy is losing 1.5 percent and Beach Energy is slipping more than 3 percent, while Woodside Petroleum, Oil Search and Santos are declining almost 3 percent each.

Among the big four banks, Commonwealth Bank and ANZ Banking are gaining almost 1 percent each, while Westpac is flat and National Australia Bank is edging down 0.4 percent.

In the tech space, Xero is edging down 0.4 percent and Zip is edging down 0.2 percent, while WiseTech Global is edging up 0.4 percent and Appen is gaining almost 3 percent. Afterpay is adding more than 2 percent after shareholders in the acquiring company Square approved a plan to issue more stock for the $39 billion takeover deal.

Gold miners are mixed. Northern Star Resources is gaining more than 1 percent, while Newcrest Mining and Evolution Mining are edging up 0.5 percent each. Resolute Mining is losing more than 2 percent. Gold Road Resources is flat.

In economic news, the total value of retail sales in Australia was up a seasonally adjusted 1.3 percent on month in September, the Australian Bureau of Statistics or ABS said on Thursday, coming in at A$29.669 billion. That was in line with expectations following the 1.7 percent decline in August. On a yearly basis, sales were up 1.7 percent. For the third quarter of 2021, retail sales fell 4.4 percent on quarter and 2.2 percent on year to A$85.348 billion.

The ABS also said Australia posted a seasonally adjusted merchandise trade surplus of A$12.243 billion in September. That exceeded expectations for a surplus of A$12.2 billion and was down from the A$15.077 billion surplus in August. Exports were down A$3.081 billion or 6 percent on month to A$44.969 billion. Imports shed A$586 million or 2 percent to A$32.725 billion. For the third quarter of 2021, Australia had a trade surplus of A$40.670 billion.

In the currency market, the Aussie dollar is trading at $0.746 on Thursday.

The Japanese stock market is significantly higher on Thursday, extending the sharp gains in the previous session after a holiday, with the benchmark Nikkei 225 above the 28,700 level, following the broadly positive cues overnight from Wall Street, as traders reacted positively to the US Federal Reserve’s monetary policy announcement. Data also showed that Japan’s October services activity grew for the first time in almost two years.

The benchmark Nikkei 225 Index closed the morning session at 29,792.47, up 271.57 points or 0.92 percent, after touching a high of 29,880.81 earlier. Japanese markets were closed for a holiday on Wednesday. Japanese stocks closed sharply higher on Tuesday.

Market heavyweight SoftBank Group is flat and Uniqlo operator Fast Retailing is gaining more than 1 percent. Among automakers, Toyota and Honda are adding almost 1 percent each.

In the tech space, Advantest is gaining more than 2 percent, Screen Holdings is surging more than 5 percent and Tokyo Electron is adding more than 2 percent.

In the banking sector, Mitsubishi UFJ Financial is gaining almost 2 percent, Sumitomo Mitsui Financial is adding more than 1 percent and Mizuho Financial is up more than 2 percent.

The major exporters are mostly lower. Sony is edging up 0.5 percent and Mitsubishi Electric is adding more than 1 percent, while Panasonic and Canon are gaining almost 2 percent each.

Among the other major gainers, Z Holdings is gaining almost 8 percent and Hitachi Zosen is adding more than 5 percent, while Yokogawa Electric and Alps Alpine are up almost 5 percent. JTEKT, NGK Insulators, Mitsui O.S.K. Lines, Toray Industries,. FUJIFILM Holdings, Nippon Yusen K.K. and Toho Zinc are all rising more than 4 percent each, while Sumitomo Heavy Industries, Oji Holdings and Keyence are up almost 4 percent.

Conversely, Mitsui E&S Holdings is plummeting more than 13 percent, Yamaha is falling almost 10 percent, Konica Minolta is shedding almost 9 percent and Kao is losing almost 4 percent.

In economic news, the services sector in Japan moved into expansion territory in October, the latest survey from Jibun Bank revealed on Thursday with a services PMI scire of 50.7. That’s up from 47.6 in September and it moves above the boom-or-bust line of 50 that separates expansion from contraction. The survey also showed that the composite index improved from 47.9 in September to 50.7 in October.

In the currency market, the U.S. dollar is trading in the lower 114 yen-range on Thursday.

Elsewhere in Asia, Indonesia is gaining 1 percent, while China, Hong Kong, Taiwan and South Korea are higher by between 0.1 and 0.7 percent each. New Zealand, Singapore and Malaysia are lower by between 0.1 and 0.4 percent each.

On Wall Street, stocks moved mostly higher over the course of the trading day on Wednesday, as traders reacted positively to the Federal Reserve’s monetary policy announcement. With the continued upward move, the major averages once again reached new record closing highs.

The major averages all closed in positive territory after a strong move to the upside late in the session. The Dow rose 104.95 points or 0.3 percent to 36,157.58, the Nasdaq jumped 161.98 points or 1 percent to 15,811.58 and the S&P 500 climbed 29.92 points or 0.7 percent to 4,660.57.

Meanwhile, the major European markets finished the day mixed. While the U.K.’s FTSE 100 Index fell by 0.4 percent, the German DAX Index closed just above the unchanged line and the French CAC 40 Index rose by 0.3 percent.

Crude oil futures settled sharply lower Wednesday after data showed a significant jump in U.S. crude inventories last week. West Texas Intermediate Crude oil futures for December ended down by $2.74 or 3.3 percent at $81.17 a barrel.

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