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Asian Markets Mostly Higher

asiancommentary dec19 19jun19 lt

Asian stock markets are mostly higher on Thursday following the positive cues overnight from Wall Street amid indications the Federal Reserve plans to cut interest rates sometime in the future. Optimism about a U.S.-China trade deal also boosted sentiment.

The Australian market is advancing following the overnight gains on Wall Street. Gains by banks were more than offset by weakness in the mining and oil sectors.

The benchmark S&P/ASX 200 Index is adding 20.20 points or 0.30 percent to 6,668.30, after earlier rising to a high of 6,672.80 earlier. The broader All Ordinaries Index is up 21.50 points or 0.32 percent to 6,750.00. Australian stocks rallied on Wednesday.

In the mining space, Rio Tinto is losing almost 5 percent after the company cut its 2019 Pilbara shipments outlook due to operational problems at its iron ore mine, particularly in the Greater Brockman hub in the Pilbara.

Fortescue Metals is lower by more than 2 percent and BHP Group is declining more than 1 percent.

In the oil sector, Santos is declining more than 1 percent, Woodside Petroleum is lower by 0.5 percent and Oil Search is down 0.2 percent.

Caltex Australia said it expects first-half underlying net profit to more than halve compared to a year ago amid difficult macro-economic conditions in the industry. The service station owner's shares are falling more than 19 percent.

The big four banks - ANZ Banking, Westpac, Commonwealth Bank and National Australia Bank - are higher in a range of 0.1 percent to 0.5 percent.

Bank of Queensland chief financial officer Matt Baxby has announced his resignation, just two weeks after the bank appointed a new chief executive. The bank's shares are lower by 0.4 percent.

Gold miners are higher as gold prices edged up after the Federal Reserve announcement. Evolution Mining is advancing almost 2 percent and Newcrest Mining is up 0.5 percent.

In the currency market, the Australian dollar is higher against the U.S dollar on Thursday. The local currency was quoted at $0.6891, up from $0.6876 on Wednesday.

The Japanese market is rising following the overnight gains on Wall Street. Investors now look ahead to the Bank of Japan's monetary policy decision due later in the day.

The benchmark Nikkei 225 Index is adding 113.16 points or 0.53 percent to 21,447.03, after touching a high of 21,464.93 in early trades. Japanese shares closed near six-week highs on Wednesday.

Market heavyweight SoftBank is edging up 0.1 percent and Fast Retailing is advancing more than 1 percent.

In the auto space, Honda Motor is losing almost 2 percent and Toyota Motor is declining 1 percent.

The major exporters are mixed on a stronger yen. Mitsubishi Electric is declining almost 1 percent and Panasonic is lower by 0.7 percent, while Sony is higher by more than 1 percent and Canon is adding 0.6 percent.

Among tech stocks, Advantest and Tokyo Electron are declining more than 1 percent each. In the banking sector, Sumitomo Mitsui Financial is lower by 0.6 percent and Mitsubishi UFJ Financial is down 0.5 percent.

In the oil sector, Japan Petroleum is advancing more than 1 percent, while Inpex is down 0.6 percent after crude oil prices closed modestly lower overnight.

Among the other major gainers, Tokyo Tatemono is rising more than 4 percent and Tokuyama Corp. is higher by almost 4 percent.

On the flip side, Alps Alpine is losing 4 percent and JGC Corp. is lower by almost 3 percent.

On the economic front, the Bank of Japan will on Thursday wrap up its monetary policy meeting and then announce its decision on interest rates. The central bank is expected to keep its benchmark lending rate steady at -0.1 percent, although as always it may be contemplating some additional form of stimulus.

Japan also will see April results for its all industry activity index.

In the currency market, the U.S. dollar is trading in the upper 107 yen-range on Thursday.

Elsewhere in Asia, Shanghai is rising almost 2 percent, while South Korea, Hong Kong, Singapore, Malaysia and Taiwan are also higher. New Zealand and Indonesia are modestly lower.

On Wall Street, stocks closed modestly higher on Wednesday after the Federal Reserve announced its widely expected decision to leave interest rates unchanged and suggested the next move for rates is likely to be lower. However, buying interest was somewhat subdued amid signs the rate cut could be delayed until next year.

The Dow edged up 38.46 points or 0.2 percent to 26,504.00, the Nasdaq climbed 33.44 points or 0.4 percent to 7,987.32 and the S&P 500 rose 8.71 points or 0.3 percent to 2,926.46.

The major European markets turned in a mixed performance on Wednesday. While the French CAC 40 Index inched up by 0.2 percent, the German DAX Index edged down by 0.2 percent and the U.K.'s FTSE 100 Index fell by 0.5 percent.

Crude oil futures settled modestly lower on Wednesday, with traders weighing official inventory data from U.S. Energy Information Administration and the Federal Reserve's policy statement. WTI crude for July declined $0.14 or about 0.3 percent at $53.76 a barrel on the New York Mercantile Exchange.

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