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Asian Markets Trade Mixed

asiancommentary dec03 14jun22 lt

Asian stock markets are trading mixed on Wednesday, following the mostly negative cues overnight from global markets, with investors largely making cautious moves ahead of the U.S. interest rate decision later in the day. The Fed is expected to hike interest rates by 50 basis points, although forecasts are suggesting a 75-bp increase. Asian Markets closed mostly lower on Tuesday.

The central bank's accompanying statement is expected to provide clues about future rate hikes and monetary policy stance. There are fears that aggressive rate tightening by the Federal Reserve would push the world's largest economy into recession.

The Bank of England is also seen raising interest rates by a modest 25 basis points on Thursday despite Monday's data showing a contraction in the country's GDP in April.

The Australian stock market is modestly lower on Wednesday, extending the losses in the previous two sessions, with the benchmark S&P/ASX 200 staying above the 6,600 level, following the mostly negative cues overnight from global markets, with materials, energy and technology stocks leading the losses.

Traders remain cautious ahead of the U.S. interest rate decision later today. The Fed is expected to hike interest rates by 50 basis points, although forecasts are suggesting a 75-bp increase. There are fears that aggressive rate tightening would push the world's largest economy into recession.

Reserve Bank of Australia (RBA) Governor Philip Lowe also said consumer price inflation would be the highest reading since mid-1990. Lowe made it clear there was more tightening to come to reign is persistently rising inflation.

The benchmark S&P/ASX 200 Index is losing 25.20 points or 0.38 percent to 6,660.80, after hitting a low of 6,629.20 earlier. The broader All Ordinaries Index is down 30.10 points or 0.44 percent to 6,851.10. Australian stocks ended sharply lower on Tuesday.

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

Oil stocks are mostly lower. Woodside Energy is losing almost 2 percent, Beach energy is down more than 1 percent and Santos is edging down 0.5 percent, while Origin Energy is edging up 0.3 percent.

In the tech space, WiseTech Global is slipping almost 3 percent, Afterpay owner Block is plunging almost 6 percent and Zip is declining sliding more than 4 percent, while Appen and Xero are declining almost 4 percent each.

Among the big four banks, ANZ Banking, Westpac and Commonwealth Bank are losing almost 1 percent each, while National Australia Bank is edging up 0.2 percent.

Among gold miners, Gold Road Resources, Resolute Mining and Northern Star Resources are losing almost 2 percent each, while Newcrest Mining is down more than 1 percent and Evolution Mining is slipping almost 1 percent.

In the currency market, the Aussie dollar is trading at $0.691 on Wednesday.

The Japanese stock market is modestly lower on Wednesday, extending the losses in the previous two sessions, with the Nikkei 225 falling below the 26,500 level, following the mostly negative cues overnight from global markets and as traders are cautious ahead of the U.S. interest rate decision later today. The Fed is expected to hike interest rates by 50 basis points, although forecasts are suggesting a 75-bp increase.

The benchmark Nikkei 225 Index is currently trading at 26,424.94, down 204.92 points or 0.77 percent, after hitting a low of 26,406.27 earlier. Japanese stocks closed slightly lower on Tuesday.

Market heavyweight SoftBank Group is gaining almost 1 percent, while Uniqlo operator Fast Retailing is flat. Among automakers, Honda is gaining more than 1 percent and Toyota is edging up 0.2 percent.

In the tech space, Screen Holdings is losing almost 2 percent, Tokyo Electron is down almost 1 percent and Advantest is declining more than 1 percent.

In the banking sector, Mizuho Financial is edging down 0.2 percent, while Mitsubishi UFJ Financial is gaining more than 1 percent and Sumitomo Mitsui Financial is up almost 1 percent.

Among the major exporters, Sony is edging down 0.5 percent, Mitsubishi Electric is declining 1.5 percent and Panasonic is edging down 0.2 percent, while Canon is edging up 0.2 percent.

Among the other major losers, Isetan Mitsukoshi Holdings is losing 5.5 percent, while Inpex and Osaka Gas are declining almost 4 percent each. Konami Holdings, Takashimaya and CyberAgent are down more than 3 percent each.

Conversely, there are no major gainers.

In economic news, the value of core machine orders in Japan spiked a seasonally adjusted 10.8 percent on month in April, the Cabinet Office said on Wednesday - coming in at 963.0 billion yen. That blew away expectations for a decline of 1.5 percent following the 7.1 percent jump in March. Ona yearly basis, core machine orders surged 19.0 percent - again topping forecasts for an increase of 5.3 percent following the 7.6 percent gain in the previous month. For the second quarter of 2022, core machine orders are forecast to sink 8.1 percent on quarter and 5.6 percent on year.

In the currency market, the U.S. dollar is trading in the 135 yen-range on Wednesday.

Elsewhere in Asia, South Korea, Malaysia, Indonesia and Taiwan are lower by between 0.1 and 1.5 percent each, while New Zealand, China, Hong Kong and Singapore are higher by between 0.1 and 1.3 percent each.

On Wall Street, stocks swung between gains and losses on Tuesday with investors largely making cautious moves ahead of the Federal Reserve's monetary policy announcement. The Fed, which is scheduled to announce its policy on Wednesday, is widely expected to hike interest rates by 50 basis points.

Among the major averages, the Dow and the S&P 500 both extended their losses to a fifth straight session. The Dow ended the session with a loss of 151.91 points or 0.5 percent at 30,364.83, the S&P 500 ended lower by 14.15 points or 0.38 percent at 3,735.48 and the Nasdaq settled at 10,828.35, gaining 19.12 points or 0.18 percent.

Meanwhile, the major European markets moved to the downside on the day. Germany's DAX fell 0.91 percent, France's CAC 40 drifted down 1.2 percent and the U.K.'s FTSE 100 shed 0.25 percent.

Crude oil futures drifted lower Tuesday on reports of a likely proposal to impose a federal surtax on oil companies to curb rising inflation. West Texas Intermediate Crude oil futures for July ended lower by $2.00 or 1.7 percent at $118.93 a barrel.

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