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Asian Markets In The Red

asiancommentary1 oct01 25feb21 lt

Asian stock markets are all in the red on Friday following the negative cues overnight from Wall Street as investor concerns about soaring bond yields are renewed, which could lead to the Federal Reserve having to raise interest rates sooner to keep inflation contained. Asian markets ended mostly higher on Thursday.

The Australian stock market is sharply lower on Friday after the main stock index came under heavy selling pressure, with the benchmark S&P/ASX 200 falling below the 6,700 level for the first time in almost four weeks as investor were concerned about rising bond yields. Overnight cues from Wall Street were also negative.

The benchmark S&P/ASX 200 Index is losing 130.80 points or 1.91 percent to 6,703.20, after touching a low of 6,658.90 earlier. The broader All Ordinaries Index is lower by 140.20 points or 1.97 percent to 6,966.00. Australian stocks ended higher on Thursday.

The major miners are weak. Fortescue Metals and BHP Group are lower by nearly 2 percent, while Rio Tinto is declining more than 1 percent.

Oil stocks are lower after crude oil prices declined overnight. Woodside Petroleum is sliding more than 2 percent, Oil Search is declining more than 1 percent and Santos is lower by nearly 1 percent.

Among the big four banks, Westpac and Commonwealth Bank are lower by more than 2 percent, while National Australia Bank and ANZ Banking are losing nearly 2 percent.

Tech stocks are mostly lower. Afterpay is losing more than 11 percent, WiseTech Global is down more than 1 percent, while Appen is declining more than 2 percent.

Gold miners are mixed after gold prices closed lower. Evolution Mining is edging up 0.5 percent, while Newcrest Mining is down almost 1 percent.

Shares of commercial explosive firm Orica Ltd. are down nearly 20 percent after it said its sales to thermal coal mining customers amidst the trade spat between Australia and China. It also flagged pandemic-related disruptions to mining activity in several regions.

Mineral firm Lynas Rare Earths posted a better-than-expected interim net profit after tax came in at A$40.6 million for the first half of 2021. Shares are higher by more than 3 percent.

Facebook has agreed to reverse its ban on all Australian news content from its platform in response to a proposed media law in the country after reaching an agreement with the Australian government.

In economic news, the Reserve Bank of Australia said that private sector credit in Australia rose 0.2 percent on month in January 2021, accelerating from the 0.3 percent gain in December. Private sector credit also expanded 1.7 percent on year.

The Japanese market is sharply lower on Friday, with the benchmark Nikkei 225 dipping more than 900 points to below 29,300, driven by a massive selloff in major technology shares. Investors are worried that rising bond yields in recent weeks could hurt high-growth companies reliant on easy borrowing. Overnight cues from Wall Street were also negative.

The benchmark Nikkei 225 Index closed the morning session at to 29,446.17, down 722.10 points or 2.39 percent, after touching a low of 29,219.15 in early trades. Japanese shares closed higher on Thursday.

Market heavyweight SoftBank Group is losing more than 3 percent, while Fast Retailing is declining more than 2 percent. Among automakers, Honda is losing nearly 2 percent and Toyota is lower by almost 2 percent.

In the tech space, Advantest is losing more than 5 percent and Tokyo Electron is down almost 3 percent. In the banking sector, Mitsubishi UFJ Financial is edging down 0.2 percent, while Sumitomo Mitsui Financial is losing 0.4 percent.

The major exporters are lower on a stronger yen. Mitsubishi Electric is declining more than 2 percent and Panasonic is declining almost 4 percent, while Canon and Sony are down almost 3 percent each.

Among the other major gainers, Mitsui Engineering & Shipbuilding is gaining almost 8 percent and Nikon is adding more than 7 percent, while Fanuc and DOWA are up nearly 6 percent. Dentsu, SUMCO and NSK are gaining more than 5 percent each, while Marubeni, Rakuten and Yamaha are up almost 5 percent each.

Conversely, Aeon is losing almost 5 percent, Suzuki Motor is lower by more than 3 percent and Seven & i is declining almost 3 percent.

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

In economic news, the Ministry of Economy, Trade and Industry said industrial output in Japan was up a seasonally adjusted 4.2 percent on month in January. That beat expectations for an increase of 4.0 percent following the 1.0 percent decline in December. On a yearly basis, industrial production dropped 5.3 percent - roughly in line with forecasts after slipping 2.6 percent in the previous month.

The METI also said that the value of retail sales in Japan was down a seasonally adjusted 0.5 percent on month in January, coming in at 12.097 trillion yen. That beat expectations for a fall of 0.6 percent following the 0.8 percent decline in December. On a yearly basis, retail sales dropped 2.4 percent - again exceeding expectations for a fall of 2.6 percent after the 0.2 percent dip in the previous month.

The Ministry of Internal Affairs and Communications said that overall consumer prices in the Tokyo region of Japan - considered a leading indicator for the nationwide trend - were down 0.3 percent on year in February, following the 0.5 percent decline in January.

Core CPI, which excludes volatile food prices, also was down an annual 0.3 percent versus expectations for a fall of 0.4 percent - which would have been unchanged from the previous month. On a seasonally adjusted monthly basis, overall inflation was up 0.1 percent and core CPI was flat.

Elsewhere in Asia, New Zealand, South Korea, Singapore, Hong Kong, Shanghai, Indonesia, Malaysia and Taiwan are all in the red and are declining up to 2.6 percent.

On Wall Street, stocks moved sharply lower over the course of the trading session on Thursday, more than offsetting the rally seen on Wednesday. The major averages came under pressure in early trading and saw further downside as the day progressed, with the tech-heavy Nasdaq posting a particularly steep loss..

The Nasdaq plunged 478.54 points or 3.5 percent to 13,119.43, its lowest closing level in nearly a month. The Dow also tumbled 559.85 points or 1.8 percent to 31,402.01 and the S&P 500 plummeted 96.09 points or 2.5 percent to 3,829.34.

The major European markets also moved to the downside on Thursday. While the German DAX Index slid by 0.7 percent, the French CAC 40 Index dipped by 0.2 percent and the U.K.'s FTSE 100 Index edged down by 0.1 percent.

Crude oil futures rose on Thursday for a fourth straight session amid hopes global energy demand will see a significant rise and hit pre-Covid-19 levels by the end of this year. West Texas Intermediate Crude oil futures for April was up $0.31 or 0.5 percent at $63.53 a barrel after hitting a fresh 13-month high of $63.81 a barrel.

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