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Asian Markets Mixed Ahead Of Fed Comments

asiaupdown march17 15jun21 lt

Asian stock markets are trading mixed on Wednesday, following the negative cues overnight from Wall Street. Traders are refraining from making significant moves as they await the U.S. Federal Reserve's monetary policy and its latest economic projections later in the day. Traders are also in a cautious mood as coronavirus cases remain high in most markets in the region. Asian markets closed mixed on Tuesday.

The Australian stock market is slightly higher on Wednesday, extending the gains of the previous three sessions, with the benchmark S&P/ASX 200 just below the 7,400 level near all-time highs, as strength in energy and financial stocks are offsetting weakness in big miners and technology stocks. Traders are optimistic after the June minutes from the RBA showed that policymakers believe the economy is expanding more rapidly than previously anticipated.

On the COVID-19 front, there have been five new locally acquired and three new overseas acquired COVID-19 cases reported in the state of Victoria, with the active cases in the state totalling 55.

Meanwhile, the Australian government has inked a free trade agreement with the U.K. that is expected boost business opportunities and deliver more Australian jobs.

The benchmark S&P/ASX 200 Index is gaining 18.50 points or 0.25 percent to 7,398.00, after touching an all-time high of 7,406.20 earlier. The broader All Ordinaries Index is up 13.20 points or 0.17 percent to 7,646.20. Australian stocks ended notably higher on Tuesday.

Among major miners, BHP Group and Rio Tinto are losing more than 1 percent each, while Mineral Resources is declining almost 2 percent. OZ Minerals is down almost 5 percent, while Fortescue Metals is edging up 0.2 percent.

Rio Tinto is set to trial the use of hydrogen to replace natural gas in a bid to cut emissions from an alumina plant in Queensland.

Oil stocks are higher after crude oil prices climbed. Oil Search, Origin Energy and Beach energy are gaining more than 1 percent each, while Woodside Petroleum is adding almost 3 percent and Santos is up almost 1 percent.

In the tech space, Afterpay is losing more than 2 percent, Appen is declining more than 4 percent, Xero is down almost 2 percent and WiseTech Global is lower by more than 1 percent.

Among the big four banks, Westpac and ANZ Banking are edging up 0.5 percent each, while National Australia Bank and Commonwealth Bank are gaining almost 1 percent each.

Gold miners are lower as gold prices tumbled overnight. Evolution Mining, Newcrest Mining, Northern Star Resources and Resolute Mining are edging down 0.5 percent each, while Gold Road Resources losing almost 1 percent.

In other news, shares in Avita Medical are surging almost 10 percent after the biotech raised its quarterly guidance due to the strength of orders for its flagship ReCell system the treatment of burns.

In economic news, the Westpac-Melbourne Institute Leading Economic Index in Australia edged down 0.06 percent on month in May, the first decline in four months, after a downwardly revised 0.2 percent gain in April.

In the currency market, the Aussie dollar is trading at $0.769 on Wednesday.

The Japanese stock market is modestly lower on Wednesday, after two previous sessions of gains, with the benchmark Nikkei index staying above the 29,300 level, following the negative cues overnight from Wall Street. The losses are capped as a steady decline in COVID-19 infections and the downgrading of the state of emergency in several areas are boosting market sentiment.

The benchmark Nikkei 225 Index closed the morning session at 29,347.20, down 94.10 points or 0.32 percent, after hitting a low of 29,301.94 earlier. Japanese stocks closed notably higher on Tuesday.

Market heavyweight SoftBank Group is losing almost 1 percent and Uniqlo operator Fast Retailing is down almost 2 percent. Among automakers, Honda and Mazda are edging up 0.4 percent each, while Toyota is gaining more than 1 percent each.

In the tech space, Screen Holdings is edging down 0.4 percent, while Advantest and Tokyo Electron are losing more than 1 percent each.

In the banking sector, Sumitomo Mitsui Financial is gaining almost 1 percent, while Mitsubishi UFJ Financial and Mizuho Financial are edging up 0.3 percent each.

Among the major exporters, Panasonic is edging down 0.5 percent and Sony is losing more than 2 percent, while Mitsubishi Electric is gaining almost 1 percent and Canon is edging up 0.3 percent

Among the other major losers, GS Yuasa and Unitika are losing more than 3 percent each, while M3 is down almost 3 percent. Eisai, Konami Holdings, DeNA, Recruit Holdings and Keio are declining more than 2 percent each.

Conversely, Sapporo Holdings is gaining almost 5 percent, while AGC, Kawasaki Kisen Kaisha and CyberAgent are adding more than 4 percent each. Nippon Sheet Glass and Inpex are up almost 4 percent each, while Yokohama Rubber and Takashimaya are up more than 3 percent each. Mitsui Chemicals, Mitsui O.S.K. Lines and Nippon Yusen K.K. are adding almost 3 percent each.

In economic news, Japan posted a merchandise trade deficit of 187.1 billion yen in May, the Ministry of Finance said on Wednesday. That missed expectations for a shortfall of 91.2 billion following the downwardly revised 253.1 billion yen surplus in April (originally 255.3 billion yen). Exports skyrocketed 49.6 percent on year, missing forecasts for a jump of 51.3 percent following the 38.0 percent spike in the previous month. Imports climbed an annual 27.9 percent versus expectations for 26.6 percent and up from 12.8 percent a month earlier.

Separately, the Cabinet Office said on Wednesday that the value of core machine orders in Japan was up a seasonally adjusted 0.6 percent on month in April, coming in at 802.9 billion yen. That missed expectations for an increase of 2.7 percent and was down from 3.7 percent in March. On a yearly basis, core machine orders gained 6.5 percent - again missing expectations for 8.0 percent following the 0.2 percent contraction in the previous month. The total value of machinery orders received by 280 manufacturers operating in Japan jumped 18.2 percent on month and 19.5 percent on year in April.

In the currency market, the U.S. dollar is trading in the lower 110 yen-range on Wednesday.

Elsewhere in Asia, South Korea, Indonesia, Singapore, and Taiwan are higher by 0.1 to 0.9 percent each, while New Zealand, Malaysia, Hong Kong and China are lower by between 0.1 and 0.9 percent each.

On Wall Street, stocks moved to the downside during trading on Tuesday, with traders looking ahead to the Federal Reserve's monetary policy announcement on Wednesday. The Nasdaq and the S&P 500 pulled back after ending the previous session at new record closing highs.

The major averages all closed in negative territory, although the tech-heavy Nasdaq underperformed its counterparts. While the Nasdaq slid 101.29 points or 0.7 percent to 14,072.86, the Dow fell 94.42 points or 0.3 percent to 34,299.33 and the S&P 500 dipped 8.56 points or 0.2 percent to 4,246.59.

Meanwhile, the major European markets have all moved to the upside on the day. The U.K.'s FTSE 100 Index, the German DAX Index and the French CAC 40 Index all finished the session up by 0.4 percent.

Crude oil prices rose sharply on Tuesday, with traders betting on hopes that demand for oil will see a significant increase in the second half of this year amid signs of a strong economic rebound from the pandemic. West Texas Intermediate Crude oil futures for July ended up $1.24 or 1.8 percent at $72.12 a barrel, the highest settlement in more than years.

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