Asian stock markets are mostly lower on Wednesday, following the negative cues overnight from Wall Street, on sliding crude oil prices and data that showed a substantial deterioration in U.S. consumer sentiment. Traders also remained concerned about alarming rise in spread of the delta variant of the coronavirus in the region and some other countries, particularly in the U.S. Asian Markets closed mostly higher on Tuesday.
Traders may be reluctant to make significant moves ahead of the release of the U.S. Labor Department’s closely watched monthly jobs report on Friday and speculating about the central bank’s likely take on monetary policy.
A report from the Conference Board also showed a substantial deterioration in U.S. consumer sentiment in the month of August, raising concerns about the pace of the economic recovery from the coronavirus pandemic.
The Australian stock market is significantly lower on Wednesday, giving up some of the gains in the previous two sessions, with the benchmark S&P/ASX 200 just floating above the 7,500 level, following the negative cues overnight from Wall Street. Traders are also getting restless amid concerns about the worsening domestic coronavirus situation in New South Wales and Victoria, with the rise in cases leading to restrictions and lockdowns.
NSW recorded 1,116 new local cases and four deaths on Tuesday. Victoria has recorded 120 new cases of COVID-19 and two deaths, with 900 total active cases of coronavirus across Victoria. This is the highest figure in 2021.
The market also traded off the day’s lows after Australia reported better-than-expected rise in GDP, which quelled fears of the nation recording its second recession in two years.
The benchmark S&P/ASX 200 Index is losing 31.20 points or 0.41 percent to 7,503.70, after hitting a low of 7,462.20 earlier. The broader All Ordinaries Index is down 32.30 points or 0.41 percent to 7,791.00. Australian stocks ended modestly higher on Tuesday.
Among major miners, BHP Group is losing almost 1 percent and Rio Tinto is down more than 1 percent, while Fortescue Metals and Mineral Resources are declining almost 2 percent each. OZ Minerals is gaining almost 1 percent.
Oil stocks are mostly mixed. Woodside Petroleum and Beach energy are edging up 0.4 percent each, while Santos and Oil Search are flat. Origin Energy is losing more than 2 percent.
In the tech space, WiseTech Global is gaining 1.5 percent, while Xero is edging down 0.4 percent. Appen and Afterpay are declining almost 2 percent each.
Among the big four banks, Westpac is edging down 0.4 percent, Commonwealth Bank is down almost 1 percent, ANZ Banking is losing more than 1 percent and National Australia Bank is flat.
Among gold miners, Evolution Mining is gaining more than 1 percent, Newcrest Mining is edging up 0.3 percent and Northern Star Resources is adding almost 1 percent, while Gold Road Resources is flat. Resolute Mining is losing almost 1 percent.
In economic news, Australia’s gross domestic product expanded 9.6 percent on year in the second quarter of 2021, the Australian Bureau of Statistics said on Wednesday. That beat forecasts for a gain of 9.2 percent following the 1.1 percent increase in the previous three months. On a seasonally adjusted quarterly basis, gross domestic product was up 0.7 percent – again exceeding expectations for an increase of 0.5 percent after rising 1.8 percent in the three months prior. Capital Expenditure was up 3.2 percent on quarter, slowing from 4.7 percent in the first quarter.
The manufacturing sector in Australia continued to expand in August, albeit at a slower pace, the latest report from Markit Economics showed on Wednesday, with a manufacturing PMI score of 52.0. That’s down from 56.9 in July, although it remains above the boom-or-bust line of 50 that separates expansion from contraction. Both demand and production fell for the first time since June 2020 as restrictions were extended.
In the currency market, the Aussie dollar is trading at $0.731 on Wednesday.
The Japanese stock market is significantly higher on Wednesday, extending the gains in the previous two sessions, with the benchmark Nikkei index above the 28,400 level, ignoring the negative cues overnight from Wall Street, on domestic political developments. However, traders remain extremely concerned as the country continues to struggle to contain the rapid spread of the delta variant of the coronavirus.
There are reports that Prime Minister Yoshihide Suga is considering replacing the ruling party’s unpopular secretary-general, Toshihiro Nikai, ahead of a party leadership election.
The benchmark Nikkei 225 Index closed the morning session at 28,446.81, up 357.27 points or 1.27 percent, after touching a high of 28,446.81 earlier. Japanese stocks closed significantly higher on Tuesday.
Market heavyweight SoftBank Group is edging up 0.5 percent and Uniqlo operator Fast Retailing is gaining almost 1 percent. Among automakers, Honda is edging up 0.2 percent and Toyota is adding almost 1 percent.
In the tech space, Screen Holdings, Advantest and Tokyo Electron are edging down 0.2 percent each.
In the banking sector, Sumitomo Mitsui Financial is gaining almost 1 percent, while Mizuho Financial and Mitsubishi UFJ Financial are adding more than 1 percent each.
Among the major exporters, Panasonic is gaining almost 1 percent, Canon is up more than 1 percent and Sony is edging up 0.4 percent, while Mitsubishi Electric is edging down 0.2 percent and Canon is flat.
Among the other major gainers, Komatsu is gaining more than 4 percent, while Oji Holdings, Yamaha and Omron are adding almost 4 percent each. Taiyo Yuden, DeNA and Toho are up more than 3 percent each. Takara Holdings, Shinsei Bank, Asahi Group, NEXON and Nikon are rising almost 3 percent each.
Conversely, Z Holdings, Kawasaki Kisen Kaisha and Mitsui Chemicals are losing almost 2 percent each.
In economic news, the manufacturing sector in Japan continued to expand in August, albeit at a slower pace, the latest report from Jibun Bank showed on Wednesday with a manufacturing PMI score of 52.7. That’s down from 53.0 in July, although it remains above the boom-or-bust line of 50 that separates expansion from contraction.
In the currency market, the U.S. dollar is trading in the higher 110 yen-range on Wednesday.
Elsewhere in Asia, Malaysia, China, Hong Kong, Indonesia and Taiwan are lower by between 0.1 and 0.6 percent each. Singapore is bucking the trend and in up 1 percent. South Korea and New Zealand are relatively flat.
On Wall Street, stocks showed a lack of direction over the course of the trading session on Tuesday before ending the day modestly lower. Trading activity was relatively subdued, leading to the lackluster performance.
The major averages ended the day just below the unchanged line. The Dow slipped 39.11 points or 0.1 percent to 35,360.73, the Nasdaq edged down 6.66 points or less than a tenth of a percent to 15,259.24 and the S&P 500 dipped 6.11 points or 0.1 percent to 4,522.68.
The major European markets also moved to the downside on the day. While the French CAC 40 Index edged down by 0.1 percent, the German DAX Index and the U.K.’s FTSE 100 Index fell by 0.3 percent and 0.4 percent, respectively.
Crude oil futures slipped Tuesday on concerns about likely excess supply in the market with OPEC and allies set to increase production, as well as the restoration of crude output in the U.S. after Hurricane Ida. West Texas Intermediate Crude oil futures for October fell $0.71 or 1 percent to $68.50 a barrel.
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