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Asian Markets Mostly Lower Ahead Of Fed Rate Decision

asiancommentary1 oct01 20sep22 lt

Asian stock markets are mostly lower on Wednesday, following the broadly negative cues from global markets overnight, ahead of the US Fed's interest rate decision as well as the anticipated hawkish accompanying statement by Fed Chair Jerome Powell later in the day. The Fed is widely expected to raise interest rates by another 75 basis points, although some see an outside chance for a 100-point rate hike after hotter-than-expected U.S. inflation data last week. Asian Markets closed mostly higher on Tuesday.

CME Group's FedWatch Tool is currently indicating an 84.0 percent chance of a 75 basis points rate hike and a 16.0 percent chance of a 100 basis point rate hike.

Several of other major central banks around the world are also scheduled to announce their latest monetary policy decisions this week, including the Bank of England and the Bank of Japan.

The Australian stock market is sharply lower on Wednesday, giving up most of the gains in the previous session, with the benchmark S&P/ASX 200 falling below the 6,800 level, following the broadly negative cues from global markets overnight, with traders cautiously awaiting the US Fed's rate decision and anticipated hawkish comments from Fed Chair Jerome Powell later in the day.

The benchmark S&P/ASX 200 Index is losing 92.80 points or 1.36 percent to 6,713.60, after hitting a low of 6,704.60 earlier. The broader All Ordinaries Index is down 95.40 points or 1.36 percent to 6,934.60. Australian stocks ended sharply higher on Tuesday.

Among major miners, BHP Group and Fortescue Metals are losing more than 2 percent each, while Rio Tinto is declining almost 3 percent and Mineral Resources is down more than 1 percent. OZ Minerals is flat.

Oil stocks are lower. Santos, Woodside Energy and Beach energy are losing almost 1 percent each, while Origin Energy is declining more than 1 percent.

In the tech space, Afterpay owner Block is losing more than 4 percent, Appen is down more than 1 percent and Zip is slipping almost 4 percent, while Xero and WiseTech Global are declining more than 2 percent each.

Among the big four banks, ANZ Banking and Westpac are losing more than 1 percent each, while National Australia Bank and Commonwealth Bank are declining almost 1 percent each.

Among gold miners, Resolute Mining is losing more than 1 percent, Gold Road Resources is slipping almost 2 percent, Newcrest Mining is sliding 2.5 percent, Evolution Mining is plunging more than 4 percent and Northern Star Resources is declining more than 2 percent.

In other news, shares in Viva Energy are advancing 5.5 percent after it acquired the fuel and convenience retailing business of Coles for $300 million.

Shares in Link Administration are down almost 5 percent after its British subsidiary was hit by an extra fine of $85 million related to the Woodford funds collapse in 2019.

Shares in Air New Zealand are soaring more than 9 percent after it provided upbeat guidance for the first half of fiscal 2023.

In the currency market, the Aussie dollar is trading at $0.669 on Wednesday.

The Japanese stock market is sharply lower on Wednesday, giving up all the gains in the previous session, with the Nikkei 225 falling below the 27,400 level, following the broadly negative cues from global markets overnight, with traders cautiously awaiting the US Fed's rate decision and anticipated hawkish comments from Fed Chair Jerome Powell later in the day.

Meanwhile, the Bank of Japan is still set to maintain ultra-low interest rates and its dovish policy guidance on Thursday as other central banks opt to hike interest rates to fight soaring inflation.

The benchmark Nikkei 225 Index closed the morning session at 27,308.66, down 379.76 points or 1.37 percent, after hitting a low of 27,297.50 earlier. Japanese stocks closed modestly higher on Tuesday.

Market heavyweight SoftBank Group is losing more than 1 percent and Uniqlo operator Fast Retailing is edging down 0.5 percent. Among automakers, Honda is losing almost 2 percent and Toyota is declining more than 2 percent.

In the tech space, Screen Holdings is edging down 0.3 percent, Advantest is declining almost 1 percent and Tokyo Electron is down almost 2 percent.

In the banking sector, Mizuho Financial and Mitsubishi UFJ Financial are edging up 0.1 to 0.3 percent each, while Sumitomo Mitsui Financial is flat.

Among the major exporters, Sony and Canon are losing 1.5 percent each, while Panasonic is down almost 1 percent and Mitsubishi Electric is declining more than 2 percent.

Among the other major losers, Unitika is plunging almost 5 percent and Daiichi Sankyo is losing almost 4 percent, while Keio, Daikin Industries, Nissan Motor, Mitsui & Co., Tokai Carbon, Pacific Metals and Taiheiyo Cement are declining more than 3 percent each. Suzuki Motor, Konica Minolta, TDK, Sumitomo Osaka Cement, Hitachi and Tokyo Electric Power Co. are down almost 3 percent each.

Conversely, Japan Steel Works is gaining almost 4 percent.

In the currency market, the U.S. dollar is trading in the higher 143 yen-range on Wednesday.

Elsewhere in Asia, Hong Kong is slipping 1.4 percent, while New Zealand, China, South Korea, Malaysia, Indonesia and Taiwan are lower by between 0.4 and 0.8 percent each. Singapore is bucking the trend and is up 0.1 percent.

On Wall Street, stocks showed a notable move back to the downside during trading on Tuesday following the advance seen going into the close of Monday's session. With the pullback on the day, the major averages fell to their lowest closing levels in two months.

The major averages climbed off their lows of the session in late-day trading but remained firmly negative. The Dow tumbled 313.45 points or 1.0 percent to 30,706.23, the Nasdaq slumped 109.97 points or 1.0 percent to 11,425.05 and the S&P 500 dove 43.96 points or 1.1 percent to 3,855.93.

The major European markets also moved to the downside on the day. While the U.K.'s FTSE 100 Index slid 0.6 percent, the German DAX Index slumped by 1.0 percent and the French CAC 40 Index tumbled by 1.4 percent.

Crude oil prices fell sharply on Tuesday amid concerns about interest rate hikes and worries about the outlook for energy demand. West Texas Intermediate Crude futures for October ended lower by $1.28 or 1.5 percent at $84.45 a barrel on expiration day.

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