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Asian Markets Mixed Amid Cautious Trades

Asian-Markets2_03Dec17.jpg

Asian stock markets are mixed on Monday amid cautious trades following the negative lead from Wall Street Friday after news that former National Security Adviser Michael Flynn has agreed to cooperate with prosecutors in the investigation of Russian meddling in last year's election.

ABC News reported that Flynn was prepared to testify that Trump directed him to make contact with the Russians while the president was still a candidate. However, the report later clarified that Flynn was given the directive "shortly after the election".

Investors also digested news that U.S. Senate Republicans narrowly passed a bill to overhaul the U.S. tax system on Saturday.

The Australian market is flat in choppy trade with investors unsure of the direction following the negative cues from Wall Street and news that U.S. Senate approved a tax overhaul. Gains by mining and oil stocks were offset by weakness in banking shares.

In late-morning trades, the benchmark S&P/ASX 200 Index is adding 2.90 points or 0.05 percent to 5,992.70, off a high of 6,000.50 earlier. The broader All Ordinaries Index is up 2.80 points or 0.05 percent to 6,078.30.

Among the major miners, BHP Billiton and Rio Tinto are rising more than 1 percent each, while Fortescue Metals is rising almost 2 percent.

Rio Tinto has named former Anglo American Plc executive Simon Thompson as its new chairman to succeed Jan du Plessis after he leaves in March.

Oil stocks are also higher as crude oil prices jumped on Friday. Woodside Petroleum is adding 0.7 percent, Santos is advancing almost 1 percent and Oil Search is rising more than 1 percent.

Meanwhile, the big four banks - ANZ Banking, National Australia Bank, Commonwealth Bank and Westpac - are lower in a range of 0.4 percent to 1 percent.

Gold miners are mixed. Newcrest Mining is down 0.4 percent, while Evolution Mining is adding 0.2 percent.

Metcash reported a 24 percent increase in first-half profit despite lower sales across its supermarkets business. The grocery wholesaler's shares are gaining almost 7 percent.

Meanwhile, G8 Education's shares are losing almost 21 percent after the childcare centre operator lowered its earnings outlook for the 2017 financial year.

Crown Resorts has been hit with a class action filed by law firm Maurice Blackburn, alleging that the company did not give shareholders enough information about risks it was taking in China. The casino operator's shares are down 0.5 percent.

On the economic front, the latest forecast from TD Securities and the Melbourne Institute showed that consumer prices in Australia are predicted to rise 0.2 percent on month in November. That follows the 0.3 percent increase predicted for October.

The Australian Bureau of Statistics said that company gross operating profits were down a seasonally adjusted 0.2 percent on quarter in the third quarter of 2017 on Monday. That missed forecasts for an increase of 0.1 percent following the 3.3 percent decline in the three months prior.

In the currency market, the Australian dollar is higher against the U.S. dollar on Monday. In early trades, the local unit was quoted at US$0.7592, up from $0.7564 on Friday.

The Japanese market is declining in cautious trades. However, losses are modest following news that U.S. Senate Republicans narrowly passed a bill to overhaul the U.S. tax system.

In late-morning trades, the benchmark Nikkei 225 Index is down 53.60 points or 0.23 percent to 22,765.43, off a low of 22,739.53 earlier.

The major exporters are mixed despite a weaker yen. Sony is adding 0.5 percent and Canon is rising 0.4 percent, while Panasonic is lower by almost 1 percent and Mitsubishi Electric is down 0.4 percent.

In the banking sector, Mitsubishi UFJ Financial is adding 0.4 percent and Sumitomo Mitsui Financial is unchanged. Among automakers, Toyota is down 0.2 percent, while Honda is adding 0.1 percent.

In the oil space, Inpex is rising more than 1 percent and Japan Petroleum is higher by almost 1 percent after crude oil prices rose on Friday.

SoftBank said it has paid a total of 1.7 billion yen, or $15.2 million, in back taxes after underreporting its income by 6.2 billion yen over the three years through March 2015. However, the company's shares are losing 1 percent.

Among the market's best performers, Citizen Watch is rising almost 7 percent, Tokai Carbon is gaining more than 4 percent and Yokohama Rubber is up almost 3 percent.

On the flip side, Olympus is losing almost 3 percent, Advantest Corp. is declining almost 2 percent and Kobe Steel is lower by almost 2 percent.

In economic news, Japan will on Monday see November results for consumer confidence and monetary base.

In the currency market, the U.S. dollar is trading in the upper 112 yen-range on Monday.

Elsewhere in Asia, Shanghai, New Zealand, Malaysia and Singapore are also lower, while South Korea, Hong Kong, Indonesia and Taiwan are advancing.

On Wall Street, stocks climbed well off their worst levels on Friday, but still ended modestly lower. A late-morning sell-off came on news that former National Security Adviser Michael Flynn has agreed to cooperate with prosecutors in the investigation of Russian meddling in last year's election.

Stocks regained ground as Senate Majority Leader Mitch McConnell, R-Ken., declared that Republican leaders have been successful in winning over enough reluctant lawmakers to pass their tax reform bill.

The Dow slipped 40.76 points or 0.2 percent to 24,231.59, the Nasdaq fell 26.39 points or 0.4 percent to 6,847.59 and the S&P 500 dipped 5.36 points or 0.2 percent to 2,642.22.

The major European markets also moved to the downside on Friday. The U.K.'s FTSE 100 Index dropped by 0.4 percent, the French CAC 40 Index slumped by 1 percent and the German DAX Index tumbled by 1.3 percent.

Crude oil futures rallied Friday after OPEC producers voted to extend supply cuts through 2018. WTI crude for January delivery jumped $0.96 or 1.7 percent to close at $58.36 a barrel on the New York Mercantile Exchange.

by RTT Staff Writer

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