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Asian Markets Mostly Lower

asiancommentary aug20 08may19 lt

Asian stock markets are mostly lower on Thursday with investors treading cautiously amid increased tensions ahead of the next round of U.S.-China trade talks in Washington this week. While speaking at a rally in Florida, U.S. President Donald Trump said that China "broke the deal" in the trade talks and so "they'll be paying".

The Australian market is rising in choppy trading following the mixed cues from Wall Street. The telecom sector is leading the gainers.

The benchmark S&P/ASX 200 Index is adding 19.20 points or 0.31 percent to 6,288.30, after touching a high of 6,289.70 earlier. The broader All Ordinaries Index is up 19.70 points or 0.31 percent to 6,371.50. Australian shares closed lower on Wednesday.

Shares of telecom companies are notably higher after the Australian Competition and Consumer Commission or ACCC revealed Wednesday it would oppose the proposed A$15 billion merger between TPG Telecom and Vodafone Hutchison Australia. However, the two companies said they will fight for the right to merge.

Shares of TPG Telecom are rising more than 4 percent, while those in Vodafone's local partner, Hutchison Telecommunications, are gaining 13 percent.

Telstra's shares are rising more than 2 percent and Vocus Group is advancing almost 2 percent.

Oil stocks are advancing after crude oil prices rose more than 1 percent overnight. Santos is higher by more than 1 percent, Woodside Petroleum is rising almost 1 percent and Oil Search is up 0.4 percent.

The big four banks are also mostly higher with modest gains. Commonwealth Bank, National Australia Bank and ANZ Banking are higher in a range of 0.1 percent to 0.4 percent, while Westpac is down 0.2 percent.

Meanwhile, the major miners are weak. Fortescue Metals is down 0.4 percent, BHP Group is declining almost 1 percent and Rio Tinto is lower by more than 1 percent.

Gold miners are mixed after gold prices declined overnight. Evolution Mining is down 0.6 percent, while Newcrest Mining is edging up 0.1 percent.

GrainCorp reported a net loss for the first half of the year despite a 25 percent increase in revenues and said it will not pay shareholders an interim dividend.

In the currency market, the Australian dollar is lower against the U.S dollar on Thursday. The local currency was quoted at $0.6980, down from $0.7020 on Wednesday.

The Japanese market is declining for the third straight day on a stronger yen and following the mixed cues from Wall Street.

The benchmark Nikkei 225 Index is losing 232.09 points or 1.07 percent to 21,370.50, after touching a low of 21,340.02 earlier. Japanese shares fell sharply to hit a five-week low on Wednesday.

The major exporters are mixed on a stronger safe-haven yen. Panasonic is adding 0.5 percent and Mitsubishi Electric is up 0.2 percent, while Sony is declining more than 1 percent and Canon is down 0.4 percent.

Among tech stocks, Advantest is up 0.2 percent and Tokyo Electron is rising 0.3 percent. China-related industrial machinery companies such as Komatsu and Fanuc are losing more than 3 percent and 2 percent, respectively.

In the auto space, Toyota is lower by more than 2 percent and Honda is losing 3 percent. Among the major banks, Mitsubishi UFJ Financial is lower by almost 1 percent and Sumitomo Mitsui Financial is down more than 1 percent.

In the oil sector, Inpex is losing more than 1 percent and Japan Petroleum is lower by 0.5 percent despite crude oil prices rising overnight.

Among the other major gainers, Yahoo Japan is gaining almost 9 percent after SoftBank Corp. said Wednesday it will spend $4 billion to raise its stake in Yahoo Japan.
Fujifilm Holdings is rising almost 3 percent and Sumitomo Heavy Industries is up 2 percent.

On the flip side, Chiyoda Corp. and Rakuten are declining more than 6 percent, while IHI Corp. is declining more than 5 percent.

In the currency market, the U.S. dollar is trading in the upper 109 yen-range on Thursday.

Elsewhere in Asia, Hong Kong is losing almost 2 percent, while Shanghai, South Korea and Taiwan are declining more than 1 percent each. Singapore Indonesia and Malaysia are also lower, while New Zealand is modestly higher.

On Wall Street, stocks closed mixed on Wednesday, reflecting uncertainty ahead of a crucial round of trade talks between the U.S. and China in the coming days. The markets had earlier benefited from optimism about the talks after White House Press Secretary Sarah Sanders told reporters there are "indications" the Chinese would like to strike a deal, reiterating a claim President Donald Trump made on Twitter.

While the Dow inched up 2.24 points or less than a tenth of a percent to 25,967.33, the Nasdaq fell 20.44 points or 0.3 percent to 7,943.32 and the S&P 500 dipped 4.63 points or 0.2 percent to 2,879.42.

The major European markets moved higher over the course of the session on Wednesday. The U.K.'s FTSE 100 Index edged up by 0.2 percent, the French CAC 40 Index rose by 0.4 percent and the German DAX Index advanced by 0.7 percent.

Crude oil prices closed higher on Wednesday, rebounding from losses posted in the previous session, after official data showed an unexpected jump in crude inventories in the U.S. in the week ended May 3. WTI crude oil futures for June ended up $0.72 or 1.2 percent at $62.12 a barrel on the New York Mercantile Exchange.

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