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Asian Markets Trading Mostly Lower

asiancommentary1 oct01 20nov22 lt

Asian stock markets are trading mostly lower on Monday, despite the broadly positive cues from global markets on Friday, as traders reacted to the fresh COVID-19 outbreak and restrictions in China with a 5-day lockdown in Guangzhou. Traders are also concerned about the outlook for interest rate hikes ahead of the release of minutes of the US Fed's last meeting on Wednesday. Asian markets closed mixed on Friday.

The much bigger than expected decrease in reading on leading U.S. economic indicators in the month of October is also weighing on the markets. Noting the index fell for the eight straight month, Ataman Ozyildirim, Senior Director, Economics, at The Conference Board, said the data suggests the economy is "possibly in a recession."

A few Fed officials, including St. Louis Federal Reserve President James Bullard have said interest rates need to be raised further in order to tame inflation.

Separately, Minneapolis Fed Bank President Neel Kashkari said the U.S. central bank should not stop rate hikes until it's clear that inflation has peaked.

The Australian stock market is slightly lower on Monday, recouping some of the gains in the previous two sessions, with the benchmark S&P/ASX 200 staying below the 7,200 level, despite the broadly positive cues from global markets on Friday, led by losses in resources, energy and technology stocks, partially offset by gains in financial stocks.

The benchmark S&P/ASX 200 Index is losing 16.00 points or 0.16 percent to 7,135.80, after touching a high of 7,174.40 and a low of 7,136.50 earlier. The broader All Ordinaries Index is down 22.50 points or 0.31 percent to 7,332.20. Australian stocks closed modestly higher on Friday.

Among the major miners, Rio Tinto is losing more than 2 percent, BHP Group is declining almost 2 percent and Fortescue Metals is declining more than 4 percent, while Mineral Resources is adding almost 5 percent. OZ Minerals is flat.

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

Among tech stocks, Afterpay owner Block is losing more than 4 percent, Appen is edging down 0.4 percent, WiseTech Global is declining more than 1 percent and Xero is slipping almost 2 percent each, while Zip is gaining almost 1 percent.

Gold miners are mostly weak. Newcrest Mining and Northern Star Resources are edging down 0.5 percent each, while Evolution Mining is losing almost 4 percent and Gold Road Resources is adding 2.5 percent. Resolute Mining is gaining almost 2 percent.

Among the big four banks, National Australia Bank is edging up 0.5 percent, while Commonwealth Bank, Westpac and ANZ Banking are gaining more than 1 percent each.

In the currency market, the Aussie dollar is trading at $0.664 on Monday.

The Japanese stock market is modestly lower on Monday, extending the losses in the previous two sessions, with the Nikkei 225 staying below the 27,900 level, despite the broadly positive cues from global markets on Friday, as traders remain cautious amid Bank of Japan maintaining its ultra-loose monetary policy even after data showed annual core consumer prices surged to a 40-year high in October.

The benchmark Nikkei 225 Index closed the morning session at 27,871.09, down 28.68 or 0.10 percent, after hitting a low of 27,846.30 and a high of 28,007.06 earlier. Japanese shares ended lower on Friday.

Market heavyweight SoftBank Group is losing almost 1 percent, while Uniqlo operator Fast Retailing is edging up 0.1 percent. Among automakers, Honda and Toyota are edging up 0.1 to 0.3 percent each.

In the tech space, Screen Holdings and Advantest are gaining more than 1 percent each, while Tokyo Electron is edging up 0.3 percent. In the banking sector, Sumitomo Mitsui Financial and Mizuho Financial are edging up 0.1 percent each, while Mitsubishi UFJ Financial is gaining almost 1 percent.

The major exporters are mostly higher, with Sony and Panasonic gaining almost 1 percent each, while Mitsubishi Electric is edging up 0.3 percent. Canon is edging down 0.3 percent.

Among the other major losers, Sompo Holdings is plummeting more than 9 percent, Tokai Carbon is plunging 6.5 percent and Showa Denko K.K. is losing more than 4 percent, while Nippon Sheet Glass and Shiseido are declining almost 3 percent each.

Conversely, Sapporo Holdings and Sumitomo Metal Mining are gaining almost 3 percent each.

In the currency market, the U.S. dollar is trading in the lower 140 yen-range on Monday.

Elsewhere in Asia, Hong Kong is surging 2.9 percent, while China and South Korea are down 1.1 percent each. Singapore, Malaysia, Indonesia and Taiwan are lower by between 0.2 and 0.9 percent each. New Zealand is bucking the trend and is up 0.3 percent.

On Wall Street, stocks failed to sustain an initial move to the upside and showed a lack of direction over the course of the trading session on Friday. The choppy trading on the day extended the volatility seen over the past several sessions.

The Dow climbed 199.37 points or 0.6 percent to end the day at 33,745.69, the S&P 500 rose 18.78 points or 0.5 percent to 3,965.34 and the Nasdaq closed up just 1.10 points or less than a tenth of a percent at 11,146.06

The major European markets all also moved to the upside on the day. While the German DAX Index shot up by 1.2 percent, the French CAC 40 Index jumped by 1.0 percent and the U.K.'s FTSE 100 Index rose by 0.5 percent.

Crude oil prices fell to a six-week low on Friday amid concerns about outlook for demand from China, and easing worries about supply. A firm dollar weighed as well on oil prices. West Texas Intermediate Crude oil futures for December dropped to $80.08, down $1.56 or about 1.9 percent. WTI crude futures shed about 10 percent this week, after having posted a loss of about 4 percent in the previous week.

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