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Asian Markets Exhibit Mixed Trend

asiancommentary dec17 30jul20 lt

Asian stock markets are mixed on Friday as investors digested data showing a record contraction in U.S. economic activity in the second quarter and an increase in U.S. jobless claims.

Meanwhile, better-than-expected quarterly earnings results from tech giants such as Apple, Amazon, Alphabet and Facebook as well as data showing that China's factory activity continued to expand in July helped ease worries about a global economic recovery.

The Australian market is notably lower following the mixed cues from Wall Street. Worries about the rising number of coronavirus cases in Australia and Asia also weighed on the market.

The benchmark S&P/ASX 200 Index is declining 62.50 points or 1.03 percent to 5,988.60, after touching a low of 5,985.60 earlier. The broader All Ordinaries Index is down 59.30 points or 0.96 percent to 6,118.20. Australian stocks closed higher on Thursday.

In the oil sector, Santos is losing more than 3 percent, Oil Search is lower by almost 3 percent and Woodside Petroleum is declining more than 2 percent after crude oil prices fell more than 3 percent overnight.

Origin Energy said fourth-quarter revenue from its share in the Australia Pacific LNG project, a joint venture with U.S.-based ConocoPhillips and China's Sinopec, declined 5.2 percent. The company's electricity sales in its energy markets division also decreased. Shares of the electricity and gas retailer are lower by almost 4 percent.

Among the major miners, BHP Group and Rio Tinto are losing more than 2 percent each, while Fortescue Metals is lower by almost 1 percent.

The big four banks - Commonwealth Bank, Westpac, National Australia Bank and ANZ Banking - are declining in a range of 1.1 percent to 2.0 percent.

AMP, which will provide its interim results on August 13, said it expects underlying profit for the first half of the year to more than halve from last year. The financial services giant's shares are tumbling more than 12 percent.

Among gold miners, Newcrest Mining and Evolution Mining are down more than 2 percent each after gold prices snapped a nine-session winning streak to close lower overnight.

On the economic front, Australia will see June figures for private sector credit and second-quarter data for producer prices today.

In the currency market, the Australian dollar is higher against the U.S. dollar on Friday. The local unit was quoted at $0.7208, compared to $0.7153 on Thursday.

The Japanese market is losing and the safe-haven yen strengthened following the mostly negative cues overnight from Wall Street. The recent spike in coronavirus infections across Japan also dampened investor sentiment. Japan recorded at least 1,304 new coronavirus cases on Thursday.

The benchmark Nikkei 225 Index is down 318.78 points or 1.43 percent to 22,020.45, after falling to a low of 21,978.67 earlier. Japanese shares closed modestly lower on Thursday.

Market heavyweight SoftBank Group is declining more than 1 percent and Fast Retailing is lower by 2 percent. In the tech space, Advantest is tumbling almost 15 percent after reporting weak quarterly results, while Tokyo Electron is down more than 1 percent.

The major exporters are notably lower on a stronger yen. Panasonic is tumbling more than 11 percent after recording its first quarterly loss in nine years, while Canon is falling almost 5 percent, Mitsubishi Electric is declining almost 2 percent and Sony is down 0.6 percent.

In the financial sector, Sumitomo Mitsui Financial is losing almost 2 percent and Mitsubishi UFJ Financial is lower by more than 1 percent. Among automakers, Honda Motor is losing more than 3 percent and Toyota is down 2 percent.

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

Among the other major gainers, TDK Corp. is gaining almost 10 percent, Z Holdings is rising more than 6 percent and Nippon Electric Glass is higher by more than 5 percent.

Conversely, Nisshinbo Holdings is losing almost 11 percent and Konica Minolta is falling almost 8 percent.

In economic news, industrial production in Japan rose a seasonally adjusted 2.7 percent on month in June, beating forecasts for a gain of 1.2 percent following the 8.9 percent decline in May.

The unemployment rate in Japan came in at a seasonally adjusted 2.8 percent in June, beating forecasts for 3.1 percent and down from 2.9 percent in May. The job-to-applicant ration fell to 1.11, missing expectations for 1.16 and down from 1.2 in the previous month.

In the currency market, the U.S. dollar is trading in the lower 104 yen-range on Friday.

Elsewhere in Asia, South Korea and Taiwan are also lower, while Shanghai is little changed. New Zealand and Hong Kong are higher. The markets in Singapore, Indonesia and Malaysia are closed on Friday in observance of Eid al-Adha.

On Wall Street, stocks closed mixed on Thursday after an early sell-off following a Commerce Department report showing a record contraction in U.S. economic activity in the second quarter. The report said real GDP plummeted at an annual rate of 32.9 percent in the second quarter following a 5.0 percent slump in the first quarter. A separate report from the Labor Department showed initial jobless claims increased for the second straight week in the week ended July 25th, although claims rose by much less than expected.

While the Nasdaq rose 44.87 points or 0.4 percent to 10,587.81, the Dow slid 225.92 points or 0.9 percent to 26,313.65 and the S&P 500 fell 12.22 points or 0.4 percent to 3,246.22.

The major European markets all moved sharply lower on Thursday. The German DAX Index plunged by 3.5 percent, while the U.K.'s FTSE 100 Index and the French CAC 40 Index tumbled by 2.3 percent and 2.1 percent, respectively.

Crude oil futures settled lower on Thursday as worries about the energy demand outlook resurfaced after data showed a sharp contraction in U.S. GDP and an uptick in unemployment claims and amid a continued surge in coronavirus cases across the world. WTI crude for September delivery tumbled $1.35 or about 3.3 percent to $39.92 a barrel.

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