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Asian Markets Mostly Higher With Modest Gains

asiancommentary dec21 14sep20 lt

Asian stock markets are mostly higher on Tuesday with modest gains following the positive cues from Wall Street and as investors turned cautious ahead of key central bank meetings this week.

The U.S. Federal Reserve's monetary policy statement is due on Wednesday, while the Bank of Japan and the Bank of England are scheduled to announce their respective monetary policy decisions on Thursday.

Meanwhile, data released by China showed that the country's industrial production and retail sales increased in August from a year ago and beat expectations, while fixed asset investment declined.

The Australian market is modestly higher as investors turned cautious ahead of key central bank meetings this week and digested minutes of the Reserve Bank of Australia's September 1 monetary policy meeting that was released today.

At the meeting, the RBA held the country's benchmark lending rate steady at the record low of 0.25 percent, but increased the size of the Term Funding Facility.

The benchmark S&P/ASX 200 Index is adding 3.30 points or 0.06 percent to 5,902.80, after touching a high of 5,919.20 earlier. The broader All Ordinaries Index is advancing 9.90 points or 0.16 percent to 6,088.40. Australian stocks closed higher on Monday.

In the tech space, Afterpay is gaining almost 4 percent, Appen is rising more than 1 percent and WiseTech Global is higher by almost 1 percent after their U.S. peers gained overnight.

In the mining sector, BHP Group is advancing almost 1 percent and Fortescue Metals is adding 0.4 percent, while Rio Tinto is declining almost 1 percent.

Gold miners are also higher after gold prices rebounded overnight. Evolution Mining is higher by more than 1 percent and Newcrest Mining is rising almost 1 percent.

Among the big four banks, Westpac, National Australia Bank and ANZ Banking are lower in a range of 1.0 percent to 1.2 percent, while Commonwealth Bank is down 0.6 percent.

In the oil sector, Woodside Petroleum is declining 0.5 percent, Santos is lower 0.4 percent and Oil Search is down 0.2 percent after crude oil prices edged down overnight.

Qantas Airways said it is considering moving its headquarter from Sydney and looking to reduce its $40 million in annual spend on lease office space in Australia as part of its efforts to reduce costs amid the coronavirus pandemic. Shares of the airline are down 0.2 percent.

On the economic front, members of the Reserve Bank of Australia's monetary policy board acknowledged that the board's unprecedented level of fiscal easing has played a key role in helping to sustain the Australian economy, minutes from the central bank's September 1 meeting has revealed. The members added that they intend to maintain the board's highly accommodative stance as long as necessary.

Australia also will see second-quarter numbers for house prices today.

The Japanese market is declining as investors booked profits after three consecutive days of gains and turned cautious ahead of key central bank meetings this week.

The benchmark Nikkei 225 Index is losing 176.47 points or 0.75 percent to 23,382.83, after touching a low of 23,351.35 earlier. Japanese stocks rose for the third straight day on Monday.

Market heavyweight SoftBank Group is declining more than 1 percent after strong gains in the previous session, while Fast Retailing is down almost 1 percent.

The major exporters are lower on a stronger yen. Sony and Canon are losing more than 2 percent each, while Panasonic is lower by almost 2 percent and Mitsubishi Electric is declining more than 1 percent.

In the tech space, Tokyo Electron is advancing more than 1 percent, while Advantest is down 0.2 percent. In the financial sector, Mitsubishi UFJ Financial is lower by 0.4 percent and Sumitomo Mitsui Financial is edging down 0.1 percent.

Among automakers, Toyota is adding 0.3 percent, while Honda Motor is losing 0.4 percent. In the oil sector, Inpex is lower by almost 2 percent and Japan Petroleum is down almost 1 percent.

Among the other major gainers, Tokai Carbon is gaining almost 4 percent and Showa Denko is rising more than 2 percent.

Conversely, JFE Holdings is losing more than 4 percent, while Yokogawa Electric, Hino Motors, JTEKT Corp. and Nippon Steel are all lower by almost 4 percent each.

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

Elsewhere in Asia, South Korea, Shanghai, Singapore, New Zealand, Taiwan, Hong Kong and Malaysia are all modestly higher, while Indonesia is lower.

On Wall Street, stocks closed higher on Monday, partly reflecting a rebound by technology stocks, which recovered after leading the markets lower last week. Shares of Nvidia saw considerable strength after the graphics chip maker announced a $40 billion acquisition of chip designer Arm Holdings. Oracle posted a standout gain amid reports the business software giant has edged out rival Microsoft in negotiations for the U.S. operations of TikTok. Positive sentiment was also generated in reaction to news that AstraZeneca has resumed a late-stage clinical trial of its coronavirus vaccine.

The Dow jumped 327.69 points or 1.2 percent to 27,993.33, the Nasdaq soared 203.11 points or 1.9 percent to 11,056.65 and the S&P 500 surged up 42.57 points or 1.3 percent to 3,383.54.

The major European markets turned in a mixed performance on Monday. While the French CAC 40 Index climbed by 0.4 percent, the German DAX Index and the U.K.'s FTSE 100 Index both edged down by 0.1 percent.

Crude oil futures settled lower on Monday, extending recent losses amid rising concerns about outlook for energy demand after OPEC lowered its oil demand forecast for 2020 and 2021. WTI crude for October ended down $0.07 or about 0.2 percent at $37.26 a barrel.

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