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Asian Markets Mixed Amid Cautious Trades

asiancommentary aug17 29jul20 lt

Asian stock markets are mixed on Thursday despite the overnight gains on Wall Street after the Federal Reserve left interest rates at near-zero levels and reiterated its commitment to use its full range of tools to support the U.S. economy amid the coronavirus pandemic.

Meanwhile, the relentless surge in coronavirus cases across the world dampened investor sentiment. According to data from Johns Hopkins University, the death toll in the U.S. from the pandemic has crossed 150,000.

The Australian market is advancing following the overnight rally on Wall Street. Upbeat earnings results from miner Fortescue Metals also boosted sentiment.

The benchmark S&P/ASX 200 Index is rising 40.00 points or 0.67 percent to 6,046.40, after touching a high of 6,052.20 earlier. The broader All Ordinaries Index is adding 43.40 points or 0.71 percent to 6,171.40. Australian stocks gave up early gains to close modestly lower on Wednesday.

Among the major miners, Fortescue Metals is rising more than 2 percent, BHP Group is advancing almost 1 percent and Rio Tinto is adding 0.6 percent.

Fortescue Metals reported iron ore shipment of 178.2 million tonnes for the full year 2020, above its own upgraded forecast and also 6 percent higher than the prior year. The company also forecast shipments of 175 million tonnes to 180 million tonnes for the year ahead.

In the oil sector, Santos is higher by almost 1 percent, Oil Search is adding 0.7 percent and Woodside Petroleum is up 0.5 percent after crude oil prices rose overnight.

The big four banks - National Australia Bank, Westpac, Commonwealth Bank and ANZ Banking - are up in a range of 0.4 percent to 0.6 percent.

Ahead of the release of its full-year results in August, Commonwealth Bank has increased its estimate of the cost of compensating customers who were erroneously charged fees for the bank's financial advice by A$300 million.

Macquarie Group said its first-quarter profit is slightly lower compared to last year due to the impact of the coronavirus pandemic, but did not disclose the extent of the impact. However, the company's shares are rising more than 2 percent.

Meanwhile, gold miners are modestly lower even as gold prices rose for a ninth straight session overnight. Newcrest Mining is lower by 0.4 percent and Evolution Mining is down 0.2 percent.

On the economic front, the Australian Bureau of Statistics said the total number of building permits issued in Australia was down a seasonally adjusted 4.9 percent on month in June - coming in at 12,213. That missed expectations for an increase of 1.5 percent, following the 15.8 percent contraction in May.

In the currency market, the Australian dollar is higher against the U.S. dollar on Thursday. The local unit was quoted at $0.7177, compared to $0.7174 on Wednesday.

The Japanese market is modestly higher following the positive cues from Wall Street. Meanwhile, news that the total number of coronavirus cases in Japan surged past the 1,000 mark for the first time on Wednesday weighed on the market.

The benchmark Nikkei 225 Index is adding 47.16 points or 0.21 percent to 22,444.27, after rising to a high of 22,506.60 in early trades. Japanese shares fell sharply on Wednesday to extend losses for a fourth straight session.

The major exporters are mostly higher on a weaker yen. Canon is rising more than 2 percent, Panasonic is adding 0.4 percent and Sony is up 0.3 percent, while Mitsubishi Electric is declining 0.5 percent.

Market heavyweight SoftBank Group is advancing almost 2 percent and Fast Retailing is adding 0.3 percent. In the tech space, Tokyo Electron is up 0.2 percent, while Advantest is lower by more than 1 percent.

In the financial sector, Sumitomo Mitsui Financial is losing more than 1 percent and Mitsubishi UFJ Financial is lower by 0.6 percent. Among automakers, Toyota is adding almost 1 percent and Honda is up 0.3 percent.

In the oil sector, Inpex is declining more than 2 percent and Japan Petroleum is down more than 1 percent even as crude oil prices rose overnight.

Japanese airline ANA Holdings is lower by almost 1 percent after reporting a quarterly loss of $1 billion, while sales fell more than 75 percent.

Among the other major gainers, Nomura Holdings is rising more than 4 percent following its upbeat first-quarter results, while Suzuki Motor and Taiyo Yuden are higher by more than 3 percent each.

Conversely, Isetan Mitsukoshi Holdings is falling almost 7 percent, Tokyo Gas is losing more than 6 percent and Kao Corp. is lower by more than 5 percent.

In economic news, the Ministry of Economy, Trade and Industry said that retail sales in Japan were down 1.2 percent on year in June. That beat forecasts for a decline of 6.5 percent following the 12.3 percent drop in May.

In the currency market, the U.S. dollar is trading in the 105 yen-range on Thursday.

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

On Wall Street, stocks closed higher on Wednesday with early buying interest generated as several big-name companies reported better than expected quarterly results. Stocks saw continued strength after the Federal Reserve announced its widely expected decision to leave interest rates at near-zero levels amid the economic hardship imposed by the coronavirus pandemic. The Fed also reiterated that it remains committed to using its full range of tools to support the U.S. economy in this challenging time.

The Dow climbed 160.29 points or 0.6 percent to 26,539.57, while the Nasdaq surged up 140.85 points or 1.4 percent to 10,542.94 and the S&P 500 jumped 40.00 points or 1.2 percent to 3,258.44.

The major European markets closed mixed on Wednesday. While the German DAX Index edged down by 0.1 percent, the U.K.'s FTSE 100 Index closed just above the unchanged line and the French CAC 40 Index advanced by 0.6 percent.

Crude oil prices moved higher on Wednesday after official data showed a much larger than expected decline in U.S. crude inventories in the week ended July 24. WTI crude for September added $0.23 or about 0.6 percent to $41.27 a barrel.

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