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Asian Markets Exhibit Mixed Trend

asiancommentary jan02 26may20 lt

Asian stock markets are exhibiting a mixed trend on Wednesday as worries about rising U.S.-China tensions offset optimism about the reopening of economies as lockdown restrictions are eased.

Bloomberg reported that the U.S. is considering a range of economic sanctions on Chinese officials and companies over the situation in Hong Kong. President Donald Trump said he will make an announcement on his administration's proposed actions by the end of this week.

The Australian market shrugged off earlier losses and is modestly higher, led by banks.

The benchmark S&P/ASX 200 Index is adding 20.40 points or 0.35 percent to 5,800.40, after touching a low of 5,713.90 earlier. The broader All Ordinaries Index is up 18.60 points or 0.32 percent to 5,908.50. Australian markets closed sharply higher on Tuesday.

The big four banks are sharply higher. National Australia Bank, Westpac and ANZ Banking are higher in a range of 3.9 percent to 4.7 percent, while Commonwealth Bank is advancing almost 2 percent.

National Australia Bank is raising A$750 million through a share repurchase plan in addition to its earlier target of A$500 million, for a total of A$1.25 billion. The bank noted that the capital raised through the offer will help it to manage through different scenarios related to the COVID-19 pandemic.

In the oil sector, Santos is rising almost 2 percent and Woodside Petroleum is adding more than 1 percent, while Oil Search is down 0.3 percent after crude oil prices gained more than 3 percent overnight.

Among the major miners, Fortescue Metals is tumbling more than 4 percent, Rio Tinto is lower by more than 3 percent and BHP is losing almost 3 percent.

Gold miners are sharply lower after gold prices declined overnight. Evolution Mining is losing more than 6 percent and Newcrest Mining is falling almost 5 percent.

Shares of vitamins producer Blackmores are in a trading halt ahead of a capital raising.

On the economic front, the total value of construction work done in Australia was down a seasonally adjusted 1.0 percent on quarter in the first quarter of 2020 - coming in at A$49.481 billion. That exceeded expectations for a decline of 1.5 percent, following the 3.0 percent drop in the three months prior.

In the currency market, the Australian dollar is higher against the U.S. dollar on Wednesday. The local unit was quoted at $0.6635, compared to Tuesday's close of $0.6591.

The Japanese market recovered after a weak start and is now modestly higher.

The benchmark Nikkei 225 Index is adding 97.01 points or 0.46 percent to 21,368.18, after touching a low of 21,142.72 in early trades. Japanese shares hit a near three-month high on Tuesday.

Market heavyweight SoftBank Group is adding 0.2 percent, while Fast Retailing is down 0.4 percent.

The major exporters are higher despite a stronger yen. Mitsubishi Electric is rising more than 2 percent, Panasonic is higher by 2 percent, Canon is adding 0.5 percent and Sony is edging up 0.1 percent.

In the tech space, Tokyo Electron is losing almost 3 percent and Advantest is declining almost 1 percent. Among automakers, Honda Motor is rising more than 2 percent, while Toyota is edging down 0.1 percent.

In the oil sector, Inpex and Japan Petroleum are rising more than 2 percent each after crude oil prices gained more than 3 percent overnight.

Among the other major gainers, Nippon Sheet Glass is climbing more than 5 percent, while T&D Holdings and Dai-ichi Life Holdings are gaining almost 4 percent each.
Shizuoka Bank, Fukuoka Financial Group and Mitsubishi UFJ Financial are all rising more than 3 percent each.

On the flip side, Idemitsu Kosan is losing more than 6 percent, M3 is lower by more than 4 percent and West Japan Railway is declining more than 2 percent.

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

Elsewhere in Asia, Malaysia is advancing more than 1 percent, New Zealand is modestly higher and Taiwan is edging higher. Shanghai, Singapore and Hong Kong are modestly lower, while South Korea is edging lower. The markets in Indonesia are closed for a holiday.

On Wall Street, stocks closed higher on Tuesday, fueled by optimism for a possible vaccine for the Covid-19 virus as U.S. biotech company Novavax said it started the first human study of its experimental coronavirus vaccine and that it expects initial results on safety and immune responses in July. There was also a positive reaction to news that several states are continuing to relax lockdown restrictions and reopening more businesses.

The Dow surged 529.95 points or 2.17 percent to finish at 24,995.11, while the Nasdaq added 15.63 points or 0.17 percent to 9,340.22 and the S&P 500 rose 36.32 points or 1.23 percent to end at 2,991.77.

The major European markets also ended on a firm note on Tuesday. The U.K.'s FTSE 100 gained 1.24 percent, Germany's DAX advanced 1 percent and France's CAC 40 surged up 1.46 percent.

Crude oil prices moved higher on Tuesday amid rising optimism that relaxation in lockdown restrictions in several countries across the world will help fuel energy demand. Also, with OPEC and its allies committed to a significant reduction in crude outputs, concerns about demand-supply mismatch appear to be easing now. WTI crude for July rose $1.10 or about 3.3 percent at $34.35 a barrel.

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