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Asian Markets Mostly Lower

asiancommentary dec27 02aug20 lt

Asian stock markets are mostly lower on Monday despite the positive cues from Wall Street on upbeat tech earnings results. Lingering worries about the relentless surge in coronavirus cases across the world and rising U.S.-China tensions weighed on the markets. A private survey showing that the manufacturing sector in China continued to expand at a faster rate in July failed to boost sentiment.

The Australian market is extending losses from the previous session as worries about the surge in coronavirus cases in Australia and rising U.S.-China tensions weighed on sentiment. Victoria has declared stage four lockdown restrictions after the state reported 671 new coronavirus cases and seven deaths on Sunday.

The benchmark S&P/ASX 200 Index is declining 29.30 points or 0.49 percent to 5,898.50, after touching a low of 5,860.70 earlier. The broader All Ordinaries Index is down 29.70 points or 0.49 percent to 6,028.60. Australian stocks closed notably lower on Friday.

The big four banks - ANZ Banking, National Australia Bank, Westpac and Commonwealth Bank - are lower n a range of 2.4 percent to 3.6 percent.

In the oil sector, Oil Search is losing almost 2 percent, while Woodside Petroleum and Santos are lower by more than 1 percent each, even as crude oil prices advanced on Friday.

Among the major miners, BHP Group is adding 0.6 percent, while Rio Tinto and Fortescue Metals are edging up 0.1 percent each.

Among gold miners, Newcrest Mining is advancing almost 1 percent and Evolution Mining is up 0.2 percent after gold prices rose on Friday.

Telstra said that a major outage that upset home internet services in Australia's eastern states on Sunday was caused by domain name server issues, after earlier claiming the outage was caused by a "malicious" cyber attack on its servers. The telecom giant's shares are up 0.2 percent.

On the economic front, the latest survey from the Australian Industry Group revealed that the manufacturing sector in Australia continued to expand in Australia, and at a faster pace, with a seasonally adjusted Performance of Manufacturing Index score of 53.5. That's up from 51.5 in June and it moves further above the boom-or-bust line of 50 that separates expansion from contraction.

In the currency market, the Australian dollar is lower against the U.S. dollar on Monday. The local currency was quoted at $0.7137, compared to $0.7222 on Friday.

The Japanese market is rising following the gains on Wall Street Friday. In addition, a weaker yen lifted shares of exporters.

Tokyo confirmed 292 new coronavirus cases on Sunday, down from the record-breaking highs reported in recent days. However, the total number of coronavirus cases reported across Japan topped 1,000 for the fifth straight day.

The benchmark Nikkei 225 Index is adding 440.60 points or 2.03 percent to 22,150.60, after rising to a high of 22,157.73 earlier. Japanese shares closed notably lower on Friday.

Market heavyweight SoftBank Group is gaining more than 4 percent and Fast Retailing is advancing more than 1 percent.

Graphics processing chip maker Nvidia is in advanced talks to buy UK-based chip designer Arm Holdings from SoftBank Group, according to reports.

In the tech space, Advantest is down 0.5 percent, while Tokyo Electron is rising 0.4 percent.

The major exporters are mostly higher on a weaker yen. Canon is gaining more than 4 percent, Sony is rising more than 2 percent and Mitsubishi Electric is adding almost 1 percent, while Panasonic is declining more than 1 percent.

In the financial sector, Mitsubishi UFJ Financial is advancing almost 2 percent and Sumitomo Mitsui Financial is adding more than 1 percent. Among automakers, Honda Motor is rising 3 percent and Toyota is up more than 1 percent.

In the oil sector, Inpex is higher by more than 1 percent, while Japan Petroleum is down 0.4 percent after crude oil prices rose on Friday.

Among the other major gainers, Z Holdings is gaining more than 14 percent and Alps Alpine is rising almost 10 percent. Suzuki Motor and Okuma Corp. are higher by more than 7 percent each.

Conversely, Casio Computer is losing more than 14 percent and Seven & I Holdings is lower by almost 8 percent. Shinsei Bank and NEC Corp. are declining more than 5 percent each.

Retail group Seven & I Holdings, owner of the 7-Eleven convenience store chain, said it has agreed to buy the Speedway gas stations in the U.S. from Marathon Petroleum for $21 billion.

In economic news, the Cabinet Office said Japan's final reading for gross domestic product in the first quarter of 2020 was unrevised, showing a 2.2 percent annualized decline and a seasonally adjusted 0.6 percent quarterly contraction. That was unchanged from June's advance reading and was in line with expectations.

The latest survey from Jibun Bank showed that the manufacturing sector in Japan continued to contract in July, albeit at a slower rate, with a manufacturing PMI score of 45.2. That's up from 40.1 in June, although it remains beneath the boom-or-bust line of 50 that separates expansion from contraction.

In the currency market, the U.S. dollar is trading in the lower 106 yen-range on Monday.

Elsewhere in Asia, Indonesia is losing 4 percent, while Singapore and Taiwan are lower by more than 1 percent each. New Zealand, Malaysia and Hong Kong are also lower, while South Korea is little changed. Shanghai is advancing more than 1 percent.

On Wall Street, stocks closed higher on Friday in a volatile session, partly reflecting a positive reaction to better than expected quarterly results from several leading technology companies such as Apple, Amazon, Facebook and Google. The upbeat tech earnings news seemed to overshadow concerns about stalled negotiations over a new coronavirus stimulus package. With the Republican-controlled Senate adjourning for the weekend on Thursday, a $600 weekly federal unemployment benefit is set to expire at the end of the day.

After falling as much as 300 points, the Dow ended the day up 114.67 points or 0.4 percent at 26,428.32. The Nasdaq surged up 157.46 points or 1.5 percent to 10,745.27 and the S&P 500 climbed 24.90 points or 0.8 percent at 3,271.12.

The major European markets moved to the downside on Friday. While the German DAX Index slid by 0.5 percent, the French CAC 40 Index and the U.K.'s FTSE 100 Index tumbled by 1.4 percent and 1.5 percent, respectively.

Crude oil futures closed higher on Friday, bouncing back from losses in the previous session, buoyed by a report from the U.S. Energy Information Administration that said oil production fell sharply in May. WTI crude for September delivery rose $0.35 or about 0.9 percent to $40.27 a barrel.

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