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Asian Markets Mixed Amid Cautious Trade

asiancommentary dec03 27jun21 lt

Asian stock markets are trading mixed on Monday, following the mixed cues from Wall Street on Friday as optimism about strong economic growth outweighed concerns about inflation. Investors are also cautious after a spike in coronavirus cases across several markets in the region over the weekend have led to lockdowns and restrictions in some areas. Asian markets closed mostly higher on Friday.

The Australian stock market is slightly lower on Monday, giving up some of the gains of the previous session, with the benchmark S&P/ASX 200 staying just above the 7,300 level, as traders are spooked by the worsening domestic coronavirus infections and the two-week lockdown in Sydney. The cues from Wall Street on Friday were mixed.

Traders are concerned after New South Wales reported 30 new COVID-19 cases on Sunday, the first day of a two-week lockdown in Sydney and Darwin. The state is fighting to quell an outbreak of the highly contagious Delta variant. Another eight cases across Australia also forced tighter restrictions in four states.

The benchmark S&P/ASX 200 Index is losing 4.40 points or 0.06 percent to 7,303.50, after hitting a low of 7,273.70 earlier. The broader All Ordinaries Index is down 9.50 points or 0.13 percent to 7,569.10. Australian stocks closed modestly higher on Friday.

Among the major miners, BHP Group is gaining almost 1 percent and Rio Tinto is edging up 0.2 percent, while Fortescue Metals and Mineral Resources are edging up 0.4 percent each. OZ Minerals is losing more than 1 percent.

Oil stocks are mixed, with Oil Search, Woodside Petroleum and Santos gaining almost 1 percent each, while Beach energy is losing almost 1 percent and Origin Energy is edging down 0.4 percent.

Among tech stocks, Afterpay is losing more than 6 percent, while WiseTech Global and Appen are down more than 1 percent. Xero is declining almost 1 percent.

Gold miners are weak. Evolution Mining and Resolute Mining are losing more than 2 percent each, while Newcrest Mining and Northern Star Resources are edging down 0.2 percent each. Gold Road Resources is plunging more than 7 percent.

Among the big four banks, ANZ Banking, National Australia Bank and Westpac are losing almost 1 percent each, while Commonwealth Bank is edging down 0.3 percent.

Westpac is selling its motor vehicle dealer finance and leasing businesses to non-bank financier Angle Finance, a portfolio company of U.S. private equity giant Cerberus Capital Management. Westpac will retain its existing retail auto loans.

Travel and hospitality stocks were battered on news of the two-week lockdown in Sydney, with Qantas losing almost 5 percent, while Flight Centre, Corporate Travel and Webjet are down more than 3 percent each. Sydney Airport is down more than 1 percent.

In the currency market, the Aussie dollar is trading at $0.758 on Monday.

Japanese stock market is modestly lower in choppy trading on Monday, giving up some of the gains of the previous two sessions, with the Nikkei 225 just below the 29,000 mark, following the mixed cues from Wall Street on Friday. Investors are spooked after Tokyo confirmed 386 fresh coronavirus cases on Sunday.

The benchmark Nikkei 225 Index closed the morning session at the day's low of 28,984.93, down 81.25 points or 0.28 percent. Japanese shares ended significantly higher on Friday.

Market heavyweight SoftBank Group is flat and Uniqlo operator Fast Retailing is gaining more than 2 percent. Among automakers, Honda and Mazda are gaining more than 1 percent each, while Toyota is edging down 0.2 percent. Nissan Motor is adding almost 3 percent.

The major exporters are mixed, with Canon edging up 0.3 percent, while Mitsubishi Electric is losing more than 1 percent and Panasonic is edging down 0.5 percent. Sony is flat.

In the tech space, Advantest and Tokyo Electron are losing more than 1 percent each, while Screen Holdings is down almost 2 percent. In the banking sector, Sumitomo Mitsui Financial and Mitsubishi UFJ Financial are edging up 0.5 percent each, while Mizuho Financial is gaining almost 1 percent.

Among the other major losers, Konami Holdings is losing more than 2 percent, while Asahi Group and Nexon are adding almost 2 percent each.

Conversely, Seven & I Holdings is gaining 4.5 percent and Nippon Steel is adding 3.2 percent, while Hitachi Zosen, JFE Holdings and Showa Denko K.K. are up almost 3 percent each. T&D Holdings, Mitsui O.S.K. Lines, Mitsubishi Chemical Holdings, GS Yuasa and Nomura Holdings are all higher by more than 2 percent each.

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

Elsewhere in Asia, Malaysia is losing 1.1 percent, while Indonesia, New Zealand and South Korea are lower by between 0.1 and 0.5 percent each. Taiwan and Singapore are up 0.5 and 0.4 percent, respectively. China is flat.

On Wall Street, stocks closed on a firm note on Friday as optimism about strong economic growth outweighed concerns about inflation, prompting traders to build up fresh positions at several counters. The major averages all closed higher, with the S&P 500 hitting a new record high in the session.

The Dow ended Friday's session with a gain of 237.02 points or 0.69 percent at 34,433.84, while the Nasdaq edged down 9.32 points or 0.06 percent to settle at 14,360.39. The S&P 500 ended the session with a gain of 14.21 points or 0.33 percent at 4,280.70, slightly off a new high of 4,286.12.

The major European markets also turned in a mixed performance on the day. While the U.K.'s FTSE 100 Index climbed by 0.4 percent and the German DAX Index moved up 0.1 percent, the French CAC 40 Index slid 0.1 percent.

Crude oil prices moved higher on Friday. The West Texas Intermediate Crude oil futures for August rose 1 percent to $74.05 a barrel.

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