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Asian Markets Mostly Higher After Fed Decision

asiancommentary dec21 11dec19 lt

Asian stock markets are mostly higher on Thursday following the positive cues overnight from Wall Street after the U.S. Federal Reserve announced its decision to leave interest rates unchanged and also signaled it expects interest rates to remain on hold throughout 2020.

Investors also looked ahead to developments on the U.S.-China trade front as a fresh round of U.S. tariffs on Chinese goods are set to kick in on December 15.

The Australian market is declining despite the positive cues from Wall Street.

The benchmark S&P/ASX 200 Index is losing 32.10 points or 0.48 percent to 6,720.50, after touching a low of 6,713.10 earlier. The broader All Ordinaries Index is lower by 31.30 points or 0.46 percent to 6,821.90. Australian stocks closed higher on Wednesday.

Among the big four banks, ANZ Banking and Westpac are losing more than 1 percent each, while Commonwealth Bank and National Australia Bank are lower by almost 1 percent each.

Oil stocks are weak after crude oil prices declined overnight. Oil Search is declining more than 1 percent, Santos is lower by 0.5 percent and Woodside Petroleum is down 0.4 percent.

Gold miners are also lower, despite gold prices rising overnight. Newcrest Mining is declining 0.7 percent and Evolution Mining is down 0.3 percent.

Bucking the trend, the major miners are modestly higher. Fortescue Metals is rising 0.3 percent, Rio Tinto is adding 0.2 percent and BHP is edging up 0.1 percent.

Wellard Ltd. said it has sold Ocean Shearer, the world's largest purpose-built livestock carrier, for $53 million to Kuwait-based transport company Al Mawashi Ltd. The live exporter's shares are gaining more than 19 percent.

On the economic front, Australia will see inflation expectations for December today.

In the currency market, the Australian dollar rose to a one-month high against the U.S. dollar on Thursday after the Federal Reserve left interest rates unchanged. The local currency was quoted at $0.6868, up from $0.6818 on Wednesday.

The Japanese market is modestly higher in choppy trade with investors remaining cautious as they digested data that showed Japan's core machine orders declined for a fourth straight month in October.

The benchmark Nikkei 225 Index is adding 34.77 points or 0.15 percent to 23,426.63, after touching a low of 23,360.43 earlier. Japanese shares closed modestly lower on Wednesday.

Market heavyweight SoftBank Group Corp. is lower by 0.2 percent, while Fast Retailing is unchanged.

The major exporters are mostly lower on a stronger yen. Panasonic is declining more than 1 percent, Mitsubishi Electric is lower by almost 1 percent and Canon is down 0.5 percent, while Sony is adding 0.5 percent.

Among auto stocks, Honda Motor is losing more than 1 percent and Toyota Motor is edging down 0.1 percent. In the oil sector, Inpex is lower by almost 1 percent and Japan Petroleum is down 0.2 percent after crude oil prices declined overnight.

Bucking the trend, tech stock Tokyo Electron is gaining more than 3 percent and Advantest is rising almost 3 percent.

Among the other major gainers, Sumco Corp. is rising more than 3 percent, while Pacific Metals and Screen Holdings are higher by more than 2 percent each.

On the flip side, Nippon Suisan Kaisha is losing more than 3 percent, while Shinsei Bank, Konami Holdings and Nomura Holdings are lower by more than 2 percent each.

On the economic front, the Cabinet Office said that the total value of core machine orders in Japan was down a seasonally adjusted 6.0 percent on month in October, coming in at 798.8 billion yen. That missed forecasts for an increase of 0.7 percent following the 2.9 percent decline in September.

In the currency market, the U.S. dollar is trading in the mid 108 yen-range on Thursday.

Elsewhere in Asia, South Korea, Hong Kong and Taiwan are all rising more than 1 percent each, while Singapore is advancing almost 1 percent. New Zealand and Malaysia are also higher. Meanwhile, Shanghai is modestly lower and Indonesia is little changed.

On Wall Street, stocks closed higher on Wednesday after the Federal Reserve announced its decision to leave interest rates unchanged after three straight rate cuts. The decision was widely anticipated, although the Fed's economic projections provided along with the announcement also showed a majority of meeting participants now expect interest rates to remain on hold throughout 2020.

The Dow crept up 29.58 points or 0.1 percent to 27,911.30, the Nasdaq climbed 37.87 points or 0.4 percent to 8,654.05 and the S&P 500 rose 9.11 point or 0.3 percent to 3,141.63.

The major European markets also saw some strength on Wednesday. The U.K.'s FTSE 100 Index closed just above the unchanged line, while the French CAC 40 Index crept up by 0.2 percent and the German DAX Index climbed by 0.6 percent.

Crude oil prices declined on Wednesday after data showed a surprise increase in crude inventories in the U.S. in the week ended December 6. WTI crude for January dipped $0.48 or about 0.8 percent to $58.76 a barrel.

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