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Asian Markets Tumbling On Recession Fears

asiancommentary1 oct01 27sep22 lt

Asian stock markets are mostly lower on Wednesday, following the mixed to negative cues from global markets overnight, as traders are cautious and remained worried that efforts by central banks around the world to curb inflation may trigger a global recession. Uncertainty due to the ongoing conflict in Ukraine is also weighing on market sentiment. Asian Markets closed mostly higher on Tuesday.

The Australian stock market is slightly higher on Wednesday, extending the gains in the previous session, with the benchmark S&P/ASX 200 moving a tod above the 6,500 level, following the mixed cues from Wall Street overnight, with energy and resource stocks continuing their rebound from the recent heavy losses amid a spike in commodity prices.

The benchmark S&P/ASX 200 Index is losing 52.90 points or 0.81 percent to 6,443.30, after hitting a low of 6,436.00 and a high of 6,516.50 earlier. The broader All Ordinaries Index is down 56.40 points or 0.84 percent to 6,640.10. Australian stocks ended modestly higher on Tuesday.

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

Oil stocks are higher. Santos and Origin Energy are gaining more than 2 percent each, while Woodside Energy is advancing 3.5 percent and Beach energy is surging almost 5 percent.

In the tech space, Afterpay owner Block is edging up 0.4 percent and Appen is gaining almost 2 percent, while Xero is edging down 0.4 percent. WiseTech Global and Zip are flat

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

Among gold miners, Gold Road Resources is gaining almost 1 percent, Newcrest Mining is edging up 0.4 percent, Evolution Mining is adding more than 2 percent and Northern Star Resources is up almost 1 percent. Resolute Mining is flat.

In other news, shares in Telix Pharma plunged 13 percent after its oncology unit announced that it withdrew its application for marketing authorization for Illuccix in Europe.

Shares in infant formula company Bubs are in a trading halt ahead of an expected announcement regarding a new joint venture arrangement for the manufacture and distribution of Bubs' products in China.

In economic news, the value of retail sales in Australia was up a seasonally adjusted 0.6 percent on month in August, the Australian Bureau of Statistics said on Wednesday - coming in at A$34.881 billion. That beat forecasts for a gain of 0.4 percent following the 1.3 percent increase in July.

In the currency market, the Aussie dollar is trading at $0.640 on Wednesday.

The Japanese stock market is sharply lower on Wednesday, giving up the small gains in the previous session, with the Nikkei 225 falling nearly 600 points to below the 26,000 mark, following the mixed cues from Wall Street overnight, with weakness across all sectors as trades react to the release of the minutes from the Bank of Japan's monetary policy meeting and the weakening yen.

The benchmark Nikkei 225 Index closed the morning session at 25,984.51, down 587.36 points or 2.21 percent, after hitting a low of 25,938.36 earlier. Japanese stocks closed modestly higher on Tuesday.

Market heavyweight SoftBank Group is losing almost 2 percent and Uniqlo operator Fast Retailing is declining more than 4 percent. Among automakers, Honda and Toyota are losing almost 2 percent each.

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

In the banking sector, Mizuho Financial is losing almost 2 percent, while Sumitomo Mitsui Financial and Mitsubishi UFJ Financial are declining more than 2 percent each.

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

Among the other major losers, Mitsubishi Motors is plunging almost 6 percent and J. Front Retailing is losing almost 5 percent, while Isetan Mitsukoshi, Holdings and Takashimaya are declining more than 4 percent each. Nippon Sheet Glass and Tokyu are down almost 4 percent each, while Asahi Group, Marui Group, Mitsui O.S.K. Lines, Sumitomo Realty & Development, Mazda Motor, Japan Steel Works, Tokyu Fudosan Holdings and Sapporo Holdings are slipping more than 3 percent each.

Conversely, there are no major gainers.

In economic news, members of the Bank of Japan's Monetary Policy Board agree that the country's economy is trending higher as the effects of COVID-19 wane, minutes from the bank's meeting on July 20 and 21 revealed on Wednesday.

At the meeting, the BoJ voted 8-1 to maintain a negative interest rate of -0.1 percent on current accounts that financial institutions maintain at the central bank. The bank will also continue to purchase a necessary amount of Japanese government bonds without setting an upper limit so that 10-year JGB yields will remain at around zero percent.

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

Elsewhere in Asia, Hong Kong, South Korea and Taiwan are slipping between 2.2 and 2.6 percent each, while New Zealand, China, Singapore, Malaysia and Indonesia are lower by between 0.3 and 1.2 percent each.

On Wall Street, stocks fluctuated over the course of the trading session on Tuesday before eventually ending the session mixed after failing to sustain an early move to the upside. While the tech-heavy Nasdaq managed to end the day modestly higher, the Dow and the S&P 500 once again fell to their lowest closing levels since late 2020.

The Nasdaq bounced back and forth across the unchanged line in afternoon trading before closing up 26.58 points or 0.3 percent to 10,829.50. Meanwhile, the Dow fell 125.82 points or 0.4 percent to 29,134.99 after surging by nearly 400 points in early trading, while the S&P 500 edged down 7.75 points or 0.2 percent to 3,647.29.

Meanwhile, the major European markets moved to the downside over the course of the session. While the German DAX Index slid 0.7 percent, the U.K.'s FTSE 100 Index fell by 0.5 percent and the French CAC 40 Index dipped by 0.3 percent.

Crude oil prices climbed higher on Tuesday on reports producers have slowed down production in the U.S. Gulf of Mexico ahead of Hurricane Ian. West Texas Intermediate Crude oil futures for November ended higher by $1.79 or 2.3 percent at $78.50 a barrel.

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