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Asian Markets Mixed Amid Cautious Trades

asiancommentary dec24 16feb20 lt

Asian stock markets are mixed on Monday following the lackluster cues from Wall Street Friday and as investors continued to assess the potential economic fallout from the coronavirus outbreak.

The Chinese market is rising amid hopes of more fiscal stimulus measures by the government to offset the impact of the coronavirus outbreak. On Monday, the People's Bank of China cut rates on its medium-term loans.

The Australian market is declining after four straight days of gains and following the lackluster cues from Wall Street Friday. Investors turned cautious as they digested a mixed batch of local corporate earnings results.

The benchmark S&P/ASX 200 Index is losing 20.30 points or 0.28 percent to 7,109.90, off a low of 7,104.40 earlier. The broader All Ordinaries Index is down 19.50 points or 0.27 percent to 7,207.60. Australian stocks closed higher for a fourth straight day on Friday.

In the banking space, National Australia Bank and Commonwealth Bank are lower by more than 1 percent each, while ANZ Banking is lower by 0.6 percent and Westpac is down 0.4 percent.

The major miners are also weak. BHP and Fortescue Metals are declining 0.6 percent each, while while Rio Tinto is down 0.3 percent.

Oil stocks are lower despite crude oil prices advancing on Friday. Woodside Petroleum is losing almost 3 percent each, Oil Search is lower by 1 percent and Santos is down 0.5 percent.

Gold miners are mixed despite gold prices rising on Friday. Evolution Mining is advancing more than 1 percent, while Newcrest Mining is down 0.3 percent.

Bendigo and Adelaide Bank recorded a 2 percent decrease in first-half cash profit, lowered its interim dividend and announced a A$300 million capital raising. The regional bank's shares are in a trading halt ahead of a share placement.

Brambles reported a 9 percent decrease in first-half net profit on a constant currency basis, but projected full-year earnings growth of about 5 percent. The logistics company's shares are gaining more than 5 percent.

QBE Insurance reported a 41 percent surge in net profit for the full year, but trimmed its final dividend. The insurer's shares are rising almost 2 percent.

In the currency market, the Australian dollar is slightly lower against the U.S. dollar on Monday. The local unit was quoted at $0.6724 on Monday, compared to $0.6718 on Friday.

The Japanese market is losing following the lackluster cues from Wall Street Friday and as investors digested data that showed Japan's economy contracted more than expected in the fourth quarter.

The benchmark Nikkei 225 Index is declining 217.38 points or 0.92 percent to 23,470.21, after touching a low of 23,335.99 in early trades. Japanese stocks closed lower on Friday.

Market heavyweight SoftBank is down 0.3 percent, while Fast Retailing is lower by almost 2 percent.

The major exporters are lower despite a slightly weaker yen. Sony is declining more than 2 percent, while Canon, Panasonic and Mitsubishi Electric are all lower by more than 1 percent each.

In the tech space, Advantest is losing almost 3 percent and Tokyo Electron is lower by more than 1 percent. Among auto stocks, Honda Motor and Toyota Motor are declining almost 1 percent each.

In the oil sector, Japan Petroleum is losing more than 4 percent and Inpex is down almost 1 percent even as crude oil prices rose Friday.

Among the few major gainers, Yokohama Rubber is rising more than 3 percent.

Conversely, Kirin Holdings is losing almost 7 percent, Kubota Corp. is lower by almost 5 percent and Dai-ichi Life Holdings is declining more than 4 percent.

In economic news, the Cabinet Office said in Monday's preliminary report that Japan's gross domestic product was down an annualized 6.3 percent in the fourth quarter of 2019. That was well shy of expectations for a decline of 3.8 percent following the 0.5 percent increase in the three months prior.

Japan will also release final December numbers for industrial production today.

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

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

On Wall Street, stocks closed little changed in choppy trading on Friday following the release of a mixed batch of U.S. economic data. While the Commerce Department released a report before the start of trading showing U.S. retail sales rose in line with estimates in January, closely watched core retail sales came in unchanged. The Federal Reserve also released a report showing a continued decrease in U.S. industrial production in the month of January, as unseasonably warm weather led to another steep drop in utilities output.

While the Dow edged down 25.23 points or 0.1 percent to 29,398.08, the Nasdaq inched up 19.21 points or 0.2 percent to 9,731.18 and the S&P 500 crept up 6.22 points or 0.2 percent to 3,380.16.

The major European markets all moved to the downside on Friday. While the German DAX Index closed just below the unchanged line, the French CAC 40 Index and the U.K.'s FTSE 100 Index fell by 0.4 percent and 0.6 percent, respectively.

Crude oil prices surged higher on Friday with traders creating fresh long positions amid hopes the coronavirus impact may not weigh on the global economy for long. WTI crude ended up $0.63 or about 1.2 percent at $52.05 a barrel.

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