Asian Markets Trade Mostly Lower

asiancommentary1 oct01 10jul22 lt

Asian stock markets are trading mostly lower on Monday, following the mixed cues from Wall Street on Friday, as the dollar strengthened to its highest level in two years and China edged towards potential lockdowns after a surge in COVID-19 cases, which ignited concerns about slowing growth. Asian markets closed mostly higher on Friday.

Meanwhile, the release of a closely watched Labor Department report showed stronger than expected U.S. job growth in June. Though it eased worries about the economy, it also added to concerns about aggressive interest rate hikes by the Federal Reserve.

The Australian stock market is modestly lower on Monday, giving up some of the gains in the previous two sessions, with the benchmark S&P/ASX 200 staying above the 6,600 level, following the mixed cues from Wall Street on Friday, with weakness in technology and materials stocks partially offset by gains in energy and financial stocks.

The benchmark S&P/ASX 200 Index is losing 39.20 points or 0.59 percent to 6,638.80, after hitting a low of 6,634.60 earlier. The broader All Ordinaries Index is down 45.60 points or 0.66 percent to 6,831.40. Australian stocks closed modestly higher on Friday.

Among the major miners, BHP Group and OZ Minerals are losing almost 2 percent each, while Rio Tinto is edging down 0.5 percent and Fortescue Metals is slipping more than 1 percent. Mineral Resources is gaining almost 1 percent.

Oil stocks are mostly higher. Santos is gaining almost 1 percent and Woodside Energy is advancing almost 2 percent, while Beach energy is edging down 0.3 percent. Origin Energy is flat.

Among tech stocks, Afterpay owner Block, WiseTech Global and Xero are losing more than 1 percent each, while Zip is slipping almost 5 percent and Appen is down almost 1 percent.

Shares in EML Payments are plunging almost 18 percent following the surprise resignation of its Chief Executive Tom Cregan after more than a decade with the company.

Gold miners are weak, Gold Road Resources and Evolution Mining are losing almost 3 percent each, while Newcrest Mining is down more than 1 percent and Northern Star Resources is declining more than 2 percent. Resolute Mining is flat.

Among the big four banks, Commonwealth Bank is gaining more than 1 percent and Westpac is adding almost 1 percent, while ANZ Banking and National Australia Bank are edging up 0.4 percent each.

In the currency market, the Aussie dollar is trading at $0.682 on Monday.

The Japanese stock market is significantly higher on Monday, extending the gains in the previous two sessions, with the Nikkei 225 moving just below the 26,800 level, following the mixed cues from Wall Street on Friday, amid prospects of administrative stability after the ruling coalition expanding its majority in an upper house election.

The benchmark Nikkei 225 Index closed the morning session at 26,787.00, up 269.81 or 1.02 percent, after touching a high of 27,062.17 earlier. Japanese shares ended slightly higher on Friday.

Market heavyweight SoftBank Group is gaining more than 2 percent and Uniqlo operator Fast Retailing is adding almost 3 percent. Among automakers, Honda and Toyota are gaining almost 2 percent each.

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

The major exporters are mostly higher, with Sony is gaining 2.5 percent, Mitsubishi Electric is adding more than 1 percent, Panasonic is up 1.5 percent and Canon is advancing more than 2 percent.

Among the other major gainers, Isetan Mitsukoshi is surging more than 5 percent, while Daiichi Sankyo, JGC Holdings and Olympus are gaining more than 4 percent each. Citizen Watch and Sumitomo Realty & Development are adding almost 4 percent each, while Recruit Holdings, Denso, J. Front Retailing, Seiko Epson, Mazda Motor, Terumo, Takashimaya and Marui Group are all up more than 3 percent each.

Conversely, Toray Industries is plunging almost 7 percent and Yaskawa Electric is losing almost 4 percent.

In economic news, the value of core machine orders in Japan was down a seasonally adjusted 5.6 percent on month in May, the Cabinet Office said on Monday - coming in at 908.8 billion yen. That just missed expectations for a decline of 5.5 percent following the 10.8 percent spike in April. On a yearly basis, core machine orders climbed 7.4 percent - beating forecasts for 5.8 percent and down from 19.0 percent in the previous month. For the second quarter of 2022, core machine orders are seen lower by 8.1 percent on quarter and 5.6 percent on year at 2,370.6 billion yen.

In the currency market, the U.S. dollar is trading in the higher 136 yen-range on Monday.

Elsewhere in Asia, Hong Kong and China are down 2.5 and 1.4 percent, respectively. New Zealand, South Korea, Taiwan and Indonesia are lower by between 0.1 and 0.5 percent each. Markets in Malaysia and Singapore are closed for Eid-ul-Adha holiday.

On Wall Street, stocks showed a lack of direction over the course of the trading day on Friday after trending higher over the past few sessions. The major averages recovered from an early move to the downside but spent the rest of the session bouncing back and forth across the unchanged line.

The major averages eventually finished the session narrowly mixed. While the Nasdaq inched up 13.96 points or 0.1 percent to 11,635.08, the Dow dipped 46.40 points or 0.2 percent to 31,338.15 and the S&P 500 edged down 3.24 points or 0.1 percent to 3,899.38.

Meanwhile, the major European markets moved to the upside over the course of the session. While the German DAX Index jumped by 1.3 percent, the French CAC 40 Index climbed by 0.4 percent and the U.K.'s FTSE 100 Index crept up by 0.1 percent.

Crude oil prices climbed higher Friday, gaining for a second straight day after the stronger than expected jobs report. West Texas Intermediate Crude oil futures for August jumped $2.06 or 2 percent at $104.79 a barrel, but WTI crude futures shed more than 3 percent in the week.

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