Asian stock markets are trading mostly lower on Tuesday, following the firmly negative cues from Wall Street overnight, as traders are concerned that the regulatory crackdowns and a collapse at Evergrande could hurt an already fragile Chinese economy and drag on global growth. The mood also remained cautious amid uncertainty of interest rates and the coronavirus infections in the region tempered by support from climbing crude oil prices. Asian stocks ended on a mixed note on Monday.
The Australian stock market is notably lower on Tuesday, giving up some of gains in the previous session, with the benchmark S&P/ASX 200 staying above the 7,200 level, following the firmly negative cues from Wall Street overnight, with technology stocks mirroring their peers on Nasdaq, partially offset by strength in energy stocks and gold miners. The domestic coronavirus situation, primarily in New South Wales and Victoria, is also denting investor sentiment.
Australia’s two biggest cities, Sydney and Melbourne, are also still under lockdown. Victoria reported a record 1,763 new locally acquired cases and four deaths, with the active cases totalling 14,368 across Victoria. NSW has reported 608 new locally acquired cases of COVID-19 and seven deaths on Monday.
The benchmark S&P/ASX 200 Index is losing 53.20 points or 0.73 percent to 7,225.30, after hitting a low of 7,202.70 earlier. The broader All Ordinaries Index is down 64.30 points or 0.85 percent to 7,512.50. Australian stocks closed significantly higher on Monday.
Among the major miners, BHP Group is losing almost 1 percent, while Fortescue Metals and OZ Minerals are declining more than 2 percent each. Rio Tinto is lower by more than 1 percent and Mineral Resources is down almost 3 percent.
Oil stocks are higher after as crude oil prices climbed overnight. Santos and Woodside Petroleum are gaining more than 2 percent each, while Oil Search and Origin Energy are adding almost 3 percent each. Beach energy is up more than 1 percent
Among the big four banks, Commonwealth Bank is edging up 0.3 percent, while ANZ Banking and Westpac are losing almost 1 percent each. National Australia Bank is edging down 0.5 percent.
Among tech stocks, Xero is losing more than 2 percent and WiseTech Global is lower by almost 3 percent, while Afterpay and Appen are declining more than 5 percent each.
Gold miners are higher. Gold Road Resources is gaining more than 3 percent, Resolute Mining is adding more than 1 percent and Northern Star Resources is rising more than 2 percent, while Evolution Mining and Newcrest Mining are up almost 1 percent each..
In economic news, the services sector in Australia continued to contract in September, albeit at a slower pace, the latest survey from Markit Economics showed on Tuesday with a services PMI score of 45.5. That’s up from 42.9 in August, although it remains beneath the boom-or-bust line of 50 that separates expansion from contraction. Also, the composite PMI improved to 46.5 from 43.3 in the previous month.
Further, the total value of retail sales in Australia was down a seasonally adjusted 1.7 percent on month in August, the Australian Bureau of Statistics or ABS said on Tuesday – coming in at A$29.275 billion. On a yearly basis, retail sales were down 0.7 percent.
ABS also said Australia posted a merchandise trade surplus of A$15.077 billion in August, easily exceeded expectations for a surplus of A$10.3 billion and was up from A$12.117 billion in July. Exports were up 4.0 percent on month or A$1.923 billion to A$48.524 billion after rising 5.0 percent a month earlier. Imports fell 1.0 percent on month or A$506 million to A$33.446 billion after rising 3.0 percent in July.
The Reserve Bank of Australia will wrap up its monetary policy meeting later in the day and then announce its decision on interest rates.
In the currency market, the Aussie dollar is trading at $0.727 on Tuesday.
The Japanese stock market is sharply lower on Tuesday, extending the losses in the previous five sessions, with the benchmark Nikkei index plunging nearly 800 points to be just above the 27,600 level, following the firmly negative cues from Wall Street overnight, with investors concerned that the regulatory crackdowns and a collapse at China Evergrande could hurt an already fragile Chinese economy and drag on global growth. The domestic coronavirus situation is also a cause of worry, despite the recent decline in case count.
The benchmark Nikkei 225 Index closed the morning session at 27,658.31, down 786.58 points or 2.77 percent, after hitting a low of 27,460.29 earlier. Japanese shares closed significantly lower on Monday.
Market heavyweight SoftBank Group is losing almost 6 percent and Uniqlo operator Fast Retailing is down more than 7 percent. Among automakers, Honda is gaining almost 1 percent, while Toyota is losing more than 2 percent.
In the tech space, Advantest is losing almost 5 percent, while Screen Holdings and Tokyo Electron are down more than 5 percent each. In the banking sector, Mitsubishi UFJ Financial is losing more than 1 percent and Mizuho Financial is edging down 0.5 percent, while Sumitomo Mitsui Financial is flat.
The major exporters are lower, with Sony declining more than 2 percent, Canon down almost 1 percent, Mitsubishi Electric declining almost 3 percent and Panasonic is lower by 1.5 percent.
Among the other major losers, Mitsui O.S.K. Lines is losing more than 7 percent, while Z Holdings and Kawasaki Kisen Kaisha are losing almost 7 percent each. Fuji Electric is down more than 6 percent, while Nippon Yusen K.K., Showa Denko K.K. and Taiyo Yuden are declining more than 5 percent each. Unitika, Daikin Industries and Kyowa Kirin are lower by almost 5 percent.
Conversely, Impex is gaining more than 4 percent, while Asahi Group and Kansai Electric Power are adding almost 3 percent each.
In economic news, the services sector in Japan continued to contract in September, albeit at a slower pace, the latest survey from Jibun Bank showed on Tuesday with a services PMI score of 47.8. That’s up from 42.9 in August, although it remains beneath the boom-or-bust line of 50 that separates expansion from contraction. Also, the composite PMI improved to 47.9 from 45.5 in the previous month.
Further, overall consumer prices in the Tokyo region of Japan were up 0.3 percent on year in September, the Ministry of Internal Affairs and Communications said on Tuesday. That was in line with expectations following the 0.4 percent contraction in August. Core CPI, which excludes volatile food prices, was up 0.1 percent on year – shy of expectations for an increase of 0.2 percent following the flat reading in the previous month. On a seasonally adjusted monthly basis, overall inflation was up 0.5 percent and core CPI rose 0.1 percent.
In the currency market, the U.S. dollar is trading in the 111 yen-range on Tuesday.
Elsewhere in Asia, South Korea is plunging 1.9 percent and New Zealand is losing 1.4 percent, while Indonesia and Singapore are down 0.4 and 0.9 percent, respectively. Hong Kong is adding 0.2 percent, while Malaysia and Taiwan are up 0.1 percent each. China remains closed for the National Day holiday.
On Wall Street, stocks ended sharply lower on Monday, after languishing in negative territory right through the day’s session. High commodity prices, a surge in Treasury yields, worries about growth and rising inflation rendered the mood bearish.
Among the major averages, the Dow, which plunged to 33,821.58 a little before noon, ended with a loss of 323.54 points or 0.94 percent at 34,002.92. The S&P 500 settled with a loss of 56.58 points or 1.3 percent at 4,300.46, while the tech-laden Nasdaq closed with a loss of 311.21 points or 2.14 percent at 14,255.48, more than 70 points off the session’s low of 14,181.69.
The major European markets also closed lower on the day. The U.K.’s FTSE 100 ended down 0.23 percent, Germany’s DAX declined 0.79 percent and France’s CAC 40 shed 0.61 percent.
Crude oil prices rose sharply on Monday, riding on the decision of OPEC to stick to its current output policy amid rising demand for petroleum products across the world. West Texas Intermediate Crude oil futures for November jumped $1.74 or 2.2 percent at $77.62 a barrel, the highest settlement since November 2014.
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