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Asian Markets Extend Losing Streak

asiancommentary jan20 25sep22 lt

Asian stock markets are trading mostly lower on Monday, following the broadly negative cues from global markets on Friday, as traders remain concerned the aggressive monetary tightening by global central banks to combat elevated inflation will push the global economy into a recession, rendering the mood in the markets extremely bearish. Asian markets closed mostly lower on Friday.

While the US Fed's projections pointed to an eventual tapering of rate hikes by next year, traders worry about the outlook for the global economy in the months ahead.

Several other central banks, including the Bank of England and the Swiss National Bank raised their benchmark rates, and the European Central Bank is likely to make a similar move at its next meeting.

Both the IMF and World Bank flagged recession risks last week as central banks across the world simultaneously hike interest rates to combat persistent inflation.

The Australian stock market is sharply lower on Monday, extending the losses in the previous two sessions, with the benchmark S&P/ASX 200 falling to three-month lows below the 6,500 level, following the broadly negative cues from global markets on Friday, with a sell-off across most sectors, led by materials and energy stocks amid tumbling commodity prices.

The benchmark S&P/ASX 200 Index is losing 87.90 points or 1.34 percent to 6,486.80, after hitting a low of 6,435.60 earlier. The broader All Ordinaries Index is down 102.50 points or 1.51 percent to 6,686.20. Australian stocks closed sharply lower on Friday.

Among the major miners, BHP Group and OZ Minerals are losing almost 4 percent each, while Mineral Resources and Fortescue Metals are sliding almost 5 percent each. Rio Tinto is declining more than 4 percent and OZ Minerals is up more than 1 percent.

Oil stocks are lower. Beach energy is plunging almost 7 percent, Woodside Energy is sliding almost 6 percent, Origin Energy is losing almost 4 percent and Santos is declining more than 5 percent.

Among tech stocks, Afterpay owner Block is adding more than 1 percent and Xero is edging up 0.2 percent, while Zip is losing almost 1 percent, WiseTech Global is edging down 0.4 percent and Appen is declining almost 2 percent.

Gold miners are lower, Gold Road Resources is plunging more than 7 percent, Evolution Mining is sliding almost 6 percent, Newcrest Mining is declining almost 5 percent, Resolute Mining is slipping more than 6 percent and Northern Star Resources is down more than 5 percent.

Among the big four banks, National Australia Bank and Commonwealth Bank are losing more than 1 percent each, while Westpac and ANZ Banking are declining almost 2 percent each.

In other news, shares in Ramsay Health care are slipping almost 5 percent after the hospital operator ceased buyout talks with a KKR-led consortium.

Shares in Syrah Resources are plummeting almost 16 percent after announcing an interruption of operations at its Balama graphite project in Mozambique due to industrial action.

Shares in Costa Group are plunging more than 13 percent on news that it's Managing Director and CEO Sean Hallahan is stepping down.

Shares in Link Administration are sliding almost 10 percent after its proposed acquisition of Dye & Durham by way of a scheme of arrangement was struck down by the court.

In the currency market, the Aussie dollar is trading at $0.651 on Monday.

The Japanese stock market is sharply lower on Monday, extending the losses in the previous two sessions, with the Nikkei 225 falling more than 500 points to below the 26,700 level, following the broadly negative cues from global markets on Friday, with a sell-off across most sectors amid continued concerns that aggressive interest rate hikes by central banks around the world to combat elevated inflation will push the global economy into a recession.

The benchmark Nikkei 225 Index closed the morning session at 26,619.53, down 534.30 or 1.97 percent, after hitting a low of 26,515.06 earlier. Japanese shares ended significantly lower Thursday ahead of the holiday on Friday.

Market heavyweight SoftBank Group is losing more than 4 percent and Uniqlo operator Fast Retailing is down more than 1 percent. Among automakers, Honda is declining more than 5 percent and Toyota is down more than 3 percent.

In the tech space, Advantest and Tokyo Electron are losing more than 3 percent each, while Screen Holdings is slipping more than 5 percent. In the banking sector, Sumitomo Mitsui Financial and Mizuho Financial are losing more than 2 percent each, while Mitsubishi UFJ Financial is slipping almost 4 percent.

The major exporters are weak, with Panasonic and Sony losing almost 4 percent each, while Canon down almost 2 percent and Mitsubishi Electric is slipping more than 3 percent.

Among the other major losers, Inpex is plunging almost 8 percent, while Fujikura and Idemitsu Kosan are losing more than 6 percent each. Mazda Motor, Fuji Electric, Toray Industries, Pacific Metals are slipping almost 6 percent, while Kawasaki Heavy Industries, NTN, Nissan Motor, Showa Denko K.K. and Subaru are down more than 5 percent each. Nikon is dropping almost 5 percent.

Conversely, there are no major gainers.

In economic news, the manufacturing sector in Japan continued to expand in September, albeit at a slower pace, the latest survey from Jibun Bank revealed on Monday with a manufacturing PMI score of 51.0. That's down from 51.5 in August, although it remains above the boom-or-bust line of 50 that separates expansion from contraction. The survey also showed that the services PMI improved from 49.5 in August to 51.9 in September, while the composite PMI went from 49.4 to 50.9.

In the currency market, the U.S. dollar is trading in the 144 yen-range on Monday.

Elsewhere in Asia, South Korea is plunging 2.2 percent, while Taiwan and Indonesia are slipping about 1.8 percent each. Singapore and Malaysia are down 0.8 and 0.3 percent, respectively. Meanwhile, Hong Kong and China are up 0.4 percent each. New Zealand is closed for National Mourning Day.

On Wall Street, stocks moved sharply lower during trading on Friday, extending the notable downward move seen over the past several sessions. With the steep drop on the day, the Dow dropped to its lowest closing level in over a year, while the Nasdaq and the S&P 500 hit three-month closing lows.

The major averages rebounded from their lows of the session going into the close but continued to post steep losses. The Dow tumbled 486.27 points or 1.6 percent to 29,590.41, the Nasdaq dove 198.88 points or 1.8 percent to 10,867.93 and the S&P 500 plunged 64.76 points or percent to 1.7 percent to 3,693.23.

The major European markets also showed significant moves to the downside on the day. While the French CAC 40 Index plummeted by 2.3 percent, the U.K.'s FTSE 100 Index and the German DAX Index both dove by 2.0 percent.

Crude oil prices fell sharply on Friday, pushing the most active crude futures contract to their lowest close in about seven months. Weak outlook for energy demand due to a possible global recession outweighed concerns about tight supplies. West Texas Intermediate Crude oil futures for November ended lower by $4.75 or 5.7 percent at $78.74 a barrel, the lowest settlement since January.

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