Asian Markets Exhibit Mixed Trend

Asian stock markets are mixed on Friday, with some of the markets paring early gains despite the overnight rebound on Wall Street. Worries about a liquidity squeeze in China and highly speculative retail trading in the U.S. weighed on sentiment. The People’s Bank of China has reportedly injected 100 billion yuan into the financial system on Friday.

The Australian market is rising after two straight days of losses and following the overnight gains on Wall Street. Better than expected local economic data also boosted sentiment.

The benchmark S&P/ASX 200 Index is advancing 50.50 points or 0.76 percent to 6,700.20, after rising to a high of 6,730.20. The broader All Ordinaries Index is adding 53.90 points or 0.78 percent to 6,971.50. Australian stocks closed sharply lower on Thursday.

Tech stocks are higher. Afterpay and WiseTech Global are rising more than 1 percent each, while Appen is advancing almost 1 percent.

Gold miners are also higher even as gold prices fell for a sixth straight session overnight. Evolution Mining is rising more than 4 percent and Newcrest Mining is adding 0.4 percent.

Among the major miners, Fortescue Metals is losing more than 1 percent, Rio Tinto is lower by almost 1 percent and BHP Group is down 0.6 percent.

The big four banks – ANZ Banking, Westpac, Commonwealth Bank and National Australia Bank – are lower in a range of 0.1 percent to 0.6 percent.

National Australia Bank said it has agreed to acquire digital bank 86400 for A$220 million as part of its efforts to grow its UBank digital bank platform.

Oil stocks are also weak after crude oil prices dropped overnight. Woodside Petroleum is declining almost 1 percent, while Oil Search and Santos are down 0.6 percent each.

In economic news, the Reserve Bank of Australia said that private sector credit in Australia rose 0.3 percent on month in December, accelerating from the 0.1 percent gain in November.

The Australian Bureau of Statistics said final demand producer prices were up 0.5 percent on quarter in the fourth quarter of 2020, following the 0.4 percent gain in the previous three months.

The Japanese market slipped into negative territory after opening higher following the positive cues from Wall Street.

The benchmark Nikkei 225 Index is down 51.79 points or 0.18 percent to 28,145.63, after touching a high of 28,320.72 in early trades. The Japanese market closed sharply lower on Thursday.

Market heavyweight SoftBank Group is down 0.2 percent, while Fast Retailing is advancing more than 1 percent. In the tech space, Advantest is rising more than 2 percent and Tokyo Electron is adding more than 1 percent.

The major exporters are mixed despite a weaker yen. Canon is losing more than 4 percent and Panasonic is tumbling almost 3 percent, while Sony is adding more than 1 percent and Mitsubishi Electric is edging up 0.1 percent.

In the banking sector, Mitsubishi UFJ Financial is declining 0.5 percent and Sumitomo Mitsui Financial is down 0.2 percent. Among automakers, Toyota is rising almost 1 percent, while Honda is lower by 0.3 percent.

Toyota said its worldwide sales for fiscal 2020 dropped 11.3 percent year-over-year to 9.53 million units, but the automaker ranked first among the world’s automakers in global auto sales for the first time in five years.

Among the other major gainers, Sumitomo Dainippon Pharma is gaining almost 8 percent and Fuji Electric is rising more than 6 percent, while Taiyo Yuden and Fujistu are higher by more than 4 percent each.

Conversely, Nissan Motor, Sharp Corp and Mitsubishi Motors are all losing more than 3 percent each, while Kawasaki Kisen Kaisha and IHI Corp. are lower by almost 3 percent each.

In economic news, industrial production in Japan dropped a seasonally adjusted 1.6 percent on month in December. That missed forecasts for a decline of 1.5 percent following the 0.5 percent fall in November.

The unemployment rate in Japan was a seasonally adjusted 2.9 percent in December, unchanged from the November reading, but shy of forecasts for 3.0 percent.

Overall consumer prices in the Tokyo region were down 0.5 percent on year in January, following the 1.3 percent drop in December. Core CPI was down 0.4 percent on year versus expectations for a fall of 0.6 percent, following the 0.9 percent decline in the previous month.

In the currency market, the U.S. dollar is trading in the mid 104 yen-range on Friday.

Elsewhere in Asia, Shanghai, Singapore, New Zealand and Hong Kong are also higher, while South Korea, Taiwan, Indonesia and Malaysia are all lower.

On Wall Street, stocks closed higher on Thursday as traders looked to pick up stocks at somewhat reduced levels following the steep drop seen on Wednesday. Buying interest may also have been generated by a report from the Labor Department showing a bigger than expected decline in first-time claims for U.S. unemployment benefits in the week ended January 23. The Commerce Department also released a report showing U.S. economic growth matched economist estimates in the fourth quarter of 2020.

The Dow surged up 300.19 points or 1 percent to 30,603.36, the Nasdaq climbed 66.56 points or 0.5 percent to 13,337.16 and the S&P 500 jumped 36.61 points or 1 percent to 3,787.38.

The major European markets turned in a mixed performance on Thursday. While the U.K.’s FTSE 100 Index slid by 0.6 percent, the German DAX Index rose by 0.3 percent and the French CAC 40 Index advanced by 0.9 percent.

Crude oil futures settled lower on Thursday as worries about the outlook for energy demand outweighed recent data showing a substantial drop in crude inventories in the U.S. last week. WTI crude for March ended lower by $0.51 or about 1 percent at $52.34 a barrel.

Market Analysis