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Asian Markets Mostly Lower On Hawkish Fed


Asian stock markets are mostly lower on Thursday following the weak cues from Wall Street after the U.S. Federal Reserve raised interest rates and stuck a hawkish tone by projecting a faster pace of rate hikes this year. In addition, U.S.-China trade tensions weighed on sentiment.

Investors are also cautious ahead of the European Central Bank's monetary policy announcement due later in the day, as the ECB has indicated its meeting will be used to discuss ending its bond purchasing program. The Bank of Japan's monetary policy meeting ends on Friday.

The Australian market is edging higher after opening lower following the negative cues from Wall Street. Investor reaction was muted to mixed Australian jobs data for the month of May.

In late-morning trades, the benchmark S&P/ASX 200 Index is adding 0.70 points or 0.01 percent to 6,024.20, after touching a low of 6,007.50 earlier. The broader All Ordinaries Index is up 3.90 points or 0.06 percent to 6,137.00.

Among the major miners, Rio Tinto and Fortescue Metals are up 0.2 percent each, while BHP Billiton is adding 0.3 percent despite a dip in iron ore prices.

Gold miners are also gaining after gold prices rose overnight. Evolution Mining is rising almost 2 percent and Newcrest Mining is adding almost 1 percent.

In the banking space, National Australia Bank, ANZ Banking, Commonwealth Bank and Westpac are lower in a range of 0.7 percent to 0.9 percent.

Oil stocks are also mostly weak despite higher crude oil prices. Santos is declining 0.3 percent and Woodside Petroleum is down 0.2 percent, while Oil Search is adding 0.4 percent.

DroneShield's shares are gaining more than 16 percent after the drone security firm won its biggest ever order from an unspecified Middle Eastern country for DroneGuns, a device that resembles a rifle and disables drones electronically.

Telstra's shares are rising almost 3 percent after an upgrade from JP Morgan.
Bubs Australia shares are in a trading halt ahead of a capital raising by the infant formula maker.

In economic news, the Australian Bureau of Statistics said that the jobless rate came in at a seasonally adjusted 5.4 percent in May. That was below expectations for 5.5 percent and down from 5.6 percent in April.

The Australian economy added 12,000 jobs last month - shy of expectations for 19,000 following the addition of 22,600 a month earlier.

In the currency market, the Australian dollar is slightly lower against the U.S. dollar on Thursday. The local unit was trading at US$0.7565, down from US$0.7569 on Wednesday.

The Japanese market is declining following the weak cues from Wall Street. In addition, a stronger yen weighed on exporters' shares.

In late-morning trades, the benchmark Nikkei 225 Index is losing 95.75 points or 0.42 percent to 22,870.63, off a low of 22,780.12 earlier.

Among the major exporters, Panasonic and Sony are declining more than 1 percent each, Mitsubishi Electric is down more than 1 percent and Canon is lower by 0.3 percent.

Automaker Toyota is edging down less than 0.1 percent and Honda is losing 0.6 percent. Toyota said Wednesday that it will invest $1 billion in Asia ride-sharing company Grab.

In the banking sector, Mitsubishi UFJ Financial is lower by 0.4 percent and Sumitomo Mitsui Financial is down almost 1 percent.

Among oil stocks, Inpex is losing more than 2 percent and Japan Petroleum Exploration is declining 0.3 percent despite an increase in crude oil prices overnight.

Shares of Toshiba are rising 0.6 percent after the company announced a planned share buyback of about 700 billion yen, keeping its promise to reward shareholders following the $18 billion sale of its memory chip business.

Among the market's best performers, Rakuten, Nippon Yusen, Mitsui OSK and Taiyo Yuden are all rising more than 2 percent each.

On the flip side, Toto is losing more than 3 percent, while Tokyu Fudosan, Oji Holdings, Nikon Corp. and Sumitomo Chemical are all declining almost 3 percent each.

In economic news, Japan will see final April numbers for industrial production and May figures for Tokyo condominium sales today.

In the currency market, the U.S. dollar is trading in the lower 110 yen-range on Thursday.

Elsewhere in Asia, Shanghai and New Zealand are also edging higher. South Korea, Singapore, Malaysia, Hong Kong and Taiwan are all lower. The markets in Indonesia remain closed this week for Eid-ul-Fitr.

On Wall Street, stocks closed lower on Wednesday after the Federal Reserve announced its decision to raise interest rates by 25 basis points to a range of 1.75 percent to 2 percent. While the rate hike was widely expected, the Fed seemed to surprise investors by forecasting two additional rate hikes this year after previously predicting one rate increase.

The tech-heavy Nasdaq edged down just 8.10 points or 0.1 percent to 7,695.70, the Dow slid 119.53 points or 0.5 percent to 25,201.20 and the S&P 500 fell 11.22 points or 0.4 percent to 2,775.63.

The major European markets turned in a lackluster performance on Wednesday. While the German DAX Index rose by 0.4 percent, the U.K.'s FTSE 100 Index and the French CAC 40 Index ended the day nearly unchanged.

Crude oil futures rose Wednesday after the U.S. government said energy inventories fell much more than forecast. July WTI oil climbed $0.28 or 0.4 percent to settle at $66.64 a barrel on the New York Mercantile Exchange.

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