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Asian Markets Mixed Amid Cautious Trades

asiancommentary dec03 19nov20 lt

Asian stock markets are mixed on Friday amid worries about rising coronavirus cases around the world and the economic impact of new lockdowns. Investors also turned cautious following news the U.S. Treasury Department is looking to end some of the Federal Reserve emergency lending programs that were initiated earlier this year due to the coronavirus pandemic.

The Australian market is extending gains from the previous session after U.S. stocks reversed earlier losses to close higher overnight amid optimism about potential resumption of negotiations over a new U.S. fiscal stimulus bill. Upbeat Australian retail sales data for October also boosted sentiment.

The benchmark S&P/ASX 200 Index is adding 13.20 points or 0.20 percent to 6,560.40, after touching a low of 6,535.60 earlier. The broader All Ordinaries Index is up 17.10 points or 0.25 percent to 6,759.80. Australian stocks recouped early losses to closed modestly higher on Thursday.

Tech stocks followed their U.S. peers higher, amid expectations that they will benefit from new lockdowns as a result of the recent spike in coronavirus cases. Afterpay and Appen are rising more than 1 percent each, while WiseTech Global is advancing almost 1 percent.

Among the major miners, Rio Tinto is rising 0.3 percent and Fortescue Metals is adding 0.2 percent, while BHP Group is down 0.4 percent.

Meanwhile, the big four banks are mixed. ANZ Banking is declining 0.6 percent and National Australia Bank is down 0.2 percent, while Commonwealth Bank is adding 0.5 percent and Westpac is edging up 0.1 percent.

Gold miners are weak after gold prices fell for a third straight session overnight. Newcrest Mining is losing almost 1 percent Evolution Mining is lower by 0.5 percent.

Oil stocks are also mostly lower after crude oil prices edged lower overnight. Woodside Petroleum is advancing more than 1 percent, while Oil Search is tumbling almost 5 percent and Santos is lower by 0.6 percent.

In economic news, the Australian Bureau of Statistics said that the total value of retail sales in Australia climbed a seasonally adjusted 1.6 percent on month in October, coming in at A$29.618 billion. That beat expectations for an increase of 0.3 percent following the 1.1 percent decline in September.

The Japanese market is lower for a third straight day despite the positive cues overnight from Wall Street. Investors remained cautious after daily coronavirus cases in Japan hit another record high on Thursday and prompted the Tokyo Metropolitan Government to raise its virus alert status to its fourth and highest level.

Data showing that the manufacturing sector in Japan continued to contract in November also dampened sentiment.

The benchmark Nikkei 225 Index is down 88.61 points or 0.35 percent to 25,545.73, after touching a low of 25,445.65 earlier. Japanese shares closed lower on Thursday.

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

The major exporters are also mixed. Sony is declining more than 1 percent and Panasonic is down almost 1 percent, while Canon and Mitsubishi Electric are adding 0.3 percent each.

In the banking sector, Mitsubishi UFJ Financial is up 0.3 percent, while Sumitomo Mitsui Financial is lower by more than 1 percent. Among automakers, Honda is adding 0.7 percent and Toyota is higher by 0.5 percent.

Among the other major gainers, Nexon Co. is rising more than 4 percent, Sumco Corp. is higher by more than 2 percent and Kubota Corp. is advancing almost 2 percent.

Conversely, MS&AD Insurance is tumbling more than 5 percent, while Daikin Industries, Sompo Holdings and T&D Holdings are all lower by more than 3 percent each.

On the economic front, the latest survey from Jibun Bank revealed that the manufacturing sector in Japan continued to contract in November, and at a faster pace, with a manufacturing PMI score of 48.3. That's down from 48.7 in October and was shy of expectations for 49.4.

It also moved further beneath the boom-or-bust line of 50 that separates expansion from contraction; the index has been in contraction for 19 straight months.

The Ministry of Communications and Internal Affairs said consumer prices in Japan were down 0.4 percent on year in October. That missed expectations for a decline of 0.3 percent following the flat reading in September.

In the currency market, the U.S. dollar is trading in the upper 103 yen-range on Friday.

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

On Wall Street, stocks closed higher on Thursday after a lackluster performance for much of the session amid a mixed batch of U.S. economic data. The notable advance by the Nasdaq seemed to reflect expectations that new lockdowns as a result of the recent spike in coronavirus cases will benefit technology companies, as was seen earlier in the pandemic. The markets also seemed to receive a boost from comments from Senate Minority Leader Chuck Schumer, D-N.Y., indicating Senate Majority Leader Mitch McConnell, R-Ken., has agreed to resume negotiations over a new stimulus bill.

The Nasdaq advanced 103.11 points or 0.9 percent to 11,904.71, while the Dow edged up 44.81 points or 0.2 percent to 29,483.23 and the S&P 500 rose 14.08 points or 0.4 percent to 3,581.87.

Meanwhile, the major European markets all moved to the downside on Thursday. While the German DAX Index slumped by 0.9 percent, the U.K.'s FTSE 100 Index and the French CAC 40 Index slid by 0.8 percent and 0.7 percent, respectively.

Crude oil futures ended lower on Thursday as rising coronavirus cases in the U.S. and Europe and imposition of fresh lockdown measures at several places raised concerns about energy demand. WTI crude for December delivery edged down $0.08 or about 0.2 percent to $$41.74 a barrel.

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