Asian Markets Mostly Lower On Inflation Woes

Asian stock markets are mostly lower on Thursday, extending the sharp losses of the previous two sessions, following the broadly negative cues overnight from Wall Street amid concerns about the accelerating pace of inflation following the release of the U.S. consumer prices data for April. Asian markets closed mostly lower on Wednesday.

The US annual inflation rate jumped to the highest in 13 years and well above forecasts, while the monthly gauge rose the most since 2009.

The markets in the region are also weighed down by the accelerating daily coronavirus infection rates caused by highly contagious variants of the virus.

The Australian stock market is modestly lower on Thursday, extending the losses of the previous two sessions, with the benchmark S&P/ASX 200 staying just above the 7,000 mark, following the broadly negative cues overnight from Wall Street. The market is primarily weighed down by weakness in technology and gold miner stocks.

The benchmark S&P/ASX 200 Index is losing 24.80 points or 0.35 percent to 7,020.10, after hitting a low of 7,000.40 earlier. The broader All Ordinaries Index is down 33.20 points or 0.46 percent to 7,247.90. Australian markets ended modestly lower on Wednesday.

Among major miners, BHP Group and Rio Tinto are gaining 0.5 percent each, while Fortescue Metals is edging down 0.5 percent.

Oil stocks are higher after crude oil prices rose overnight. Oil Search and Santos are edging up about 0.5 percent each, while Woodside Petroleum and Beach Energy are gaining almost 1 percent each.

Among Tech stocks, Appen is losing almost 4 percent, Afterpay is down almost 6 percent and WiseTech Global is declining more than 3 percent.

Shares in Xero are plunging almost 10 percent after the accounting platform reported that revenue by 18 percent to NZ$848.8 million from last year after reaching record subscriber numbers of 2.74 million. It also reported a profit of NZ$19.8 million for the year, up from $3.3 million the previous year.

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

Among gold miners, Evolution Mining and Gold Road Resources are losing more than 1 percent each, while Newcrest Mining is edging up 0.4 percent. Northern Star Resources is down almost 3 percent and Resolute Mining is edging down 0.5 percent.

Shares in Perenti Global are plunging more than 24 percent after the mining services firm lowered its forecast for the second half of 2021, saying it now expects revenues and operating margins to be consistent with the first half. It also provided a softened outlook for fiscal 2022 as headwinds associated with COVID-19 and labor are expected to continue for the next 12 to 18 months.

Explosives maker Orica reported that net profit for the half-year to March 31 plunged 54 percent to $77 million and also slashed its interim dividend to 7.5 cents from 16.5 cents. The stock is down more than 2 percent.

Shares in Treasury Wine Estates are gaining almost 4 percent after the wine maker reported that 2021 earnings would be in the range of $495 million to $515 million, above market expectations. Over the long term, it was targeting high single-digit average earnings growth along with a group-wide earnings margin of 25 percent.

Shares in Graincorp’s are surging more than 6 percent after the agribusiness reported a 30.8 percent jump in total revenue to $2.56 billion for the first half. . Underlying profit from continuing operations was also up nearly 90 percent to $50.5 million, though this was down 87 percent on a statutory basis. The company also reinstated its dividend and will pay a fully franked interim dividend of 8 cents on July 22, its first interim payout in three years.

In the currency market, the Aussie dollar is trading at $0.773 on Thursday.

The Japanese stock market is sharply lower on Thursday, extending the sharp losses of the previous two sessions, with the Nikkei 225 again losing more than 500 points to break below the 27,000 mark, following the broadly negative cues overnight from Wall Street as inflation concerns prompted a sell-off. The accelerating daily coronavirus infection rates are also dampening market sentiment.

According to the Health Ministry, the number of COVID-19 patients with severe symptoms in Japan rose to a fresh record 1,189. The country’s government has expanded and extended the coronavirus-induced state of emergency in several areas.

The benchmark Nikkei 225 Index closed the morning session at 27,628.73, down 518.78 points or 1.84 percent, after hitting a low of 27,534.39 earlier. Japanese shares ended significantly lower on Wednesday.

Market heavyweight SoftBank Group is plunging more than 7 percent and Uniqlo operator Fast Retailing is losing more than 3 percent. Among automakers, Honda is gaining almost 1 percent, while Toyota is losing more than 1 percent.

In the tech space, Advantest is losing almost 6 percent, Screen Holdings is declining more than 4 percent and Tokyo Electron is down almost 5 percent. In the banking sector, Mitsubishi UFJ Financial is gaining more than 1 percent, Sumitomo Mitsui Financial is up almost 2 percent and Mizuho Financial is adding almost 1 percent.

The major exporters are mostly lower. Mitsubishi Electric is edging down 0.5 percent, Sony is losing almost 2 percent, Canon is declining more than 2 percent and Panasonic is down almost 1 percent.

Among the other major losers, Nexon in plummeting almost 15 percent, NEC is plunging almost 12 percent, JEC is losing almost 11 percent, Toppan Printing is down more than 7 percent and Denka is declining 6 percent. CyberAgent is lower by almost 6 percent and Terumo is losing more than 5 percent.

Conversely, Marui Group is gaining almost 7 percent, UBE Industries is adding almost 7 percent Seven & I Holdings is up more than 6 percent and GS Yuasa is rising more than 4 percent. Amada, Kirin Holdings and Shizuoka Bank are gaining almost 4 percent each.

In economic news, Japan posted a current account surplus of 2,650.1 billion yen in March, the Ministry of Finance said on Thursday – up 37.3 percent on year. That missed expectations for a surplus of 2,796.2 billion yen and was down from 2,916.9 billion yen in February.

Separately, the Bank of Japan said on Thursday the value of overall bank lending in Japan was up 4.8 percent on year in April, coming in at 579.574 trillion yen. That follows the downwardly revised 6.2 percent increase in March (originally 6.3 percent). Excluding trusts, bank lending was up an annual 4.3 percent at 503.081 trillion yen – slowing from 5.9 percent in the previous month.

In the currency market, the U.S. dollar is trading in the higher 109 yen-range on Thursday.

Elsewhere in Asia, New Zealand, China, Hong Kong, Indonesia, Singapore, Taiwan, South Korea all are lower by between 0.1 and 0.9 percent each. Malaysia and Indonesia are bucking the trend and are up 0.3 percent and 0.5 percent, respectively.

On Wall Street, stocks moved sharply lower over the course of the trading day on Wednesday, extending the pullback seen earlier in the week. With the steep drop on the day, the major averages ended the session at their lowest closing levels in over a month.

The major averages saw further downside going into the close, ending the day just off their lows of the session. The Dow tumbled 681.50 points or 2 percent to 33,587.66, the Nasdaq plummeted 357.75 points or 2.7 percent to 13,031.68 and the S&P 500 plunged 89.06 points or 2.1 percent to 4,063.04.

Meanwhile, the major European markets all moved to the upside on the day. While the U.K.’s FTSE 100 Index advanced by 0.8 percent, the German DAX Index and the French CAC 40 Index both edged up by 0.2 percent.

Crude oil prices moved higher on Wednesday on optimism about the outlook for energy demand and data showing a drop in crude stockpiles last week. West Texas Intermediate Crude oil futures for June ended up by $0.80 or 1.2 percent at $66.08 a barrel.

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