Asian Markets Mostly Lower Amid Cautious Trades

Asian stock markets are mostly lower on Wednesday, following the negative cues overnight from Wall Street, reflecting concerns about acceleration in the rate of inflation and potential monetary policy tightening by the U.S. Federal Reserve. Traders are also cautious and refraining from making major moves amid the continued surge in coronavirus cases in most markets in the region, particularly in India and Japan. Asian markets closed mostly higher on Tuesday.

Trader are also awaiting the release of the minutes of the Federal Reserve’s April monetary policy meeting later today, which may provide clues for plans of monetary policy tightening.

The Australian stock market is sharply lower on Wednesday, snapping three straight sessions of gains, with the benchmark S&P/ASX 200 falling below the 7,000 mark, following the negative cues overnight from Wall Street on sliding crude oil prices and concern over the outlook for interest rates. Stocks across all sectors are in the red, particularly energy, materials, and technology.

Traders also await the release of the minutes of the Federal Reserve’s latest policy meeting for more cues on the U.S. central bank’s monetary policy.

The benchmark S&P/ASX 200 Index is losing 130.80 points or 1.85 percent to 6,935.20, after hitting a low of 6,931.10 earlier. The broader All Ordinaries Index is down 125.20 points or 1.72 percent to 7,173.90. Australian stocks ended modestly higher on Tuesday.

Among major miners, BHP Group and Fortescue Metals are losing more than 2 percent each, while Rio Tinto and OZ Minerals are down more than 3 percent each. Mineral Resources are declining almost 3 percent.

In the tech space, WiseTech Global, Xero and Afterpay are flat, while artificial intelligence services provider Appen is surging more than 10 percent after reiterating its guidance.

Among the big four banks, ANZ Banking, Westpac, Commonwealth Bank and National Australia Bank are all losing more than 1 percent each.

Gold miners are also weak. Evolution Mining is losing 1 percent and Resolute Mining is declining almost 3 percent, while Northern Star Resources and Newcrest Mining are down more than 2 percent each. Gold Road Resources is flat.

Oil stocks were lower after crude oil prices softened. Oil Search and Santos are losing more than 3 percent each, while Woodside Petroleum is down almost 2 percent. Origin Energy is declining almost 3 percent.

In other news, shares in EMl Payments are plummeting more than 36 percent on news that it’s Irish subsidiary Prepaid Financial Services (PFS), which was bought in March 2020 for $252.3 million, is facing significant Irish regulatory problems due to Brexit. PFS was regulated by British authorities before Brexit

Travel broker Webjet released full-year figures for a new year-ending date of March 31, with the company’s net loss widening 9 percent to $156.6 million over the nine-month period. Revenue was down 86 per cent to $38.5 million. No dividend was declared, with payout suspended until at least July 2022. The stock is down more than 2 percent.

In economic news, the wage price index in Australia was up a seasonally adjusted 0.6 percent on quarter in the first three months of 2021, the Australian Bureau of Statistics said on Wednesday. That exceeded expectations for 0.5 percent and was unchanged from the three months prior. On a yearly basis, the WPI advanced 1.5 percent – beating forecasts for 1.4 percent, which would have been unchanged.

Separately, the latest survey from Wetspac Bank and the Melbourne Institute revealed on Wednesday that consumer confidence in Australia fell 4.7 percent on month to 113.1 in May, from an eleven-year high of 118.8 in April.

In the currency market, the Aussie dollar is trading at $0.779 on Wednesday.

The Japanese stock market is sharply lower on Wednesday, giving up most of the gains of the previous session, with the benchmark Nikkei index losing 400 points to stay just above the 28,000 mark, following the negative cues overnight from Wall Street. Traders also continue to be cautious amid the accelerating daily coronavirus infection rates caused by highly contagious variants of the virus and the slow vaccine roll out.

The benchmark Nikkei 225 Index closed the morning session at 28,008.09, down 398.75 points or 1.40 percent, after hitting a low of 27,842.98 in early trades. Japanese stocks closed sharply higher on Tuesday.

Market heavyweight SoftBank Group is losing almost 2 percent and Uniqlo operator Fast Retailing is down more than 2 percent. Among automakers, Honda is losing more than 1 percent and Toyota is down almost 1 percent.

In the tech space, Tokyo Electron is losing more than 1 percent and Advantest is down almost 2 percent, while Screen Holdings is edging up 0.3 percent. In the banking sector, Sumitomo Mitsui Financial is edging down 0.2 percent, while Mizuho Financial is edging up 0.4 percent and Mitsubishi UFJ Financial is gaining more than 1 percent.

Among the major exporters, Panasonic and Canon are edging down 0.3 percent, while Sony is gaining almost 1 percent. Mitsubishi Electric is flat.

Among the other major losers, Fujikura is losing almost 4 percent, while Dentsu, Mitsui Chemicals and Rakutan are down more than 3 percent each. Daikin Industries, Nippon Light Metal, TDK, Teijin, Credit Saison, Takara Holdings and Idemitsu Kosan are all declining almost 3 percent each. Kubota, Tokyu, Toyota Tsusho and Marui Group are losing more than 2 percent each.

Conversely, Mitsubishi Chemical is gaining more than 4 percent and Japan Steel works is adding almost 4 percent, while Kajima, Kawasaki Kisen Kaisha and Trend Micro are up more than 2 percent each. Taisei and Nippon Yusen are rising almost 2 percent each.

In economic news, Japan will release final March numbers for industrial production; the preliminary reading suggested an increase of 2.2 percent on month and 4.0 percent on year.

In the currency market, the U.S. dollar is trading in the higher 108 yen-range on Wednesday.

Elsewhere in Asia, New Zealand, China, Singapore, Malaysia and Indonesia are all lower by between 0.3 and 0.9 percent each. Taiwan is bucking the trend and is edging down 0.1 percent. The markets in South Korea and Hong Kong are closed for Buddha’s birthday and National Day, respectively.

On Wall Street, stocks failed to hold early gains and ended weak on Tuesday as disappointing data on housing starts, and a sell-off in the technology section weighed on the market. Investors looked ahead to the release of the minutes of the Federal Reserve’s April monetary policy meeting for clues about monetary tightening.

The Dow ended down by 267.13 points or 0.78 percent at 34,060.66, after having advanced to 34,408.99 in early trades. The Nasdaq, which rose to 14,485.34, settled at 13,303.64, recording a loss of 75.41 points or 0.56 percent, while the S&P 500 slid 35.46 points or 0.85 percent to settle at 4,127.83.

The major European markets also failed to hold early gains and closed mixed on the day. The U.K.’s FTSE 100 edged up 0.02 percent, Germany’s DAX shed 0.07 percent and France’s CAC 40 ended 0.21 percent down.

Crude oil futures settled lower Tuesday, weighed down by signs of progress in the Iran nuclear talks. Traders were also weighing global energy demand prospects amid the continued surge in coronavirus cases in Asian countries. West Texas Intermediate Crude oil futures for June ended lower by $0.78 or 1.2 percent at $65.49 a barrel.

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