Asian Markets Mixed Amid Cautious Trade

Asian stock markets are mixed on Thursday, following the negative cues overnight from Wall Street as the accelerating pace of inflation and the bitcoin’s sharp plunge weighed on the market. Traders are also cautious amid tensions between Beijing and Washington, and the rising worries about the spikes in coronavirus cases in the region. Asian markets closed mostly lower on Wednesday.

The release of minutes of the Federal Reserve’s April monetary policy meeting showed that members debated whether or not increasing inflation may be more than “transitory.” The minutes also showed that the central bank may start to discuss when to start rolling back asset purchases, especially as the country continues to make headway against Covid-19 and inflation keeps trending higher.

The Australian stock market is significantly higher on Thursday, recouping some of the sharp losses of the previous session, with the benchmark S&P/ASX 200 still a tad below the 7,000 mark, as weakness in miners, energy and travel stocks are offset by strength in financial and technology stocks. Traders shrugged off the negative cues overnight from Wall Street.

The benchmark S&P/ASX 200 Index is gaining 61.70 points or 0.89 percent to 6,993.40, after touching a high of 6,999.60 and a low of 6,919.40 earlier. The broader All Ordinaries Index is up 60.30 points or 0.84 percent to 7,226.00. Australian markets ended sharply lower on Wednesday.

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

Oil stocks are lower after crude oil prices tumbled overnight. Oil Search, Beach Energy and Santos are losing more than 2 percent each, while Woodside Petroleum is down more than 1 percent and Origin Energy is flat.

Among Tech stocks, Appen is gaining almost 2 percent, Afterpay is surging more than 5 percent, WiseTech Global is adding more than 1 percent and Xero up more than 4 percent.

Among the big four banks, Westpac and National Australia Bank are gaining almost 1 percent each, while ANZ Banking is adding more than 1 percent and Commonwealth Bank is up more than 2 percent.

Among gold miners, Evolution Mining is losing almost 2 percent, Newcrest Mining is down almost 1 percent, Northern Star Resources is lower by more than 1 percent and Resolute Mining is down 0.5 percent. Gold Road Resources is gaining more than 1 percent.

In other news, travel stocks were lower after Qantas said it would slash the front-end commissions it pays for selling tickets on its international flight to 1 percent from 5 percent. Webjet is losing more than 5 percent and Corporate Travel Management is down more than 3 percent, while Flight Centre and Helloworld are declining almost 6 percent each.

Meanwhile, shares in Qantas are up more than 3 percent after a trading update said it was “slowly starting to turn the corner” after the pandemic and was on track to return to 95 percent of pre-COVID domestic capacity in the June quarter. However, it pushed back the resumption date of most international flying to late December from late October. It is set to report a loss of more than $2 billion for the full year due to the COVID-19 pandemic, but says it has started to pay down its debt pile.

Agricultural chemical company Nufarm swing to a $58.9 million first half profit on strong growth across its seed technology business. However, the company expects its full-year result to be weighted heavily towards the first six months of the year. The stock is up more than 3 percent.

Shares in Nuix are plunging more than 9 percent after the technology giant Days dropped half of its defence against a multi-million-dollar damages claim by its former CEO Eddie Sheehy. It also announced an earnings downgrade last month.

In economic news, the unemployment rate in Australia fell a seasonally adjusted 5.5 percent in April, the Australian Bureau of Statistics said on Thursday. That was beneath expectation for a 5.6 percent drop and down from the upwardly revised 5.7 percent in March (originally 5.6 percent). The Australian economy lost 30,600 jobs last month, well shy of expectations for a gain of 15,000 jobs following the addition of 70,700 jobs in March. The participation rate fell to 66.0 percent, missing forecasts for 66.3 – which would have been unchanged from the previous month.

In the currency market, the Aussie dollar is trading at $0.774 on Thursday.

The Japanese stock market is marginally lower in choppy trading on Thursday, extending the sharp losses of the previous session, with the benchmark Nikkei 225 hovering around the 28,000 mark, as traders digest local core machine orders, imports, exports and trade balance data. The cues overnight from Wall Street were also negative.

According to reports, the Bank of Japan Governor Haruhiko Kuroda has warned that downward pressure on economic activities due to the ongoing pandemic could grow stronger due to uncertainty over the pace of the country’s vaccination rollout. The Japanese economy shrank more than expected in the first three months of 2021.

The benchmark Nikkei 225 Index closed the morning session at 28,030.46, down 13.99 points or 0.05 percent, after hitting a low of 27,821.96 and a high of 28,169.28 earlier. Japanese shares ended significantly lower on Wednesday.

Market heavyweight SoftBank Group is flat and Uniqlo operator Fast Retailing is losing almost 1 percent. Among automakers, Honda is edging down 0.3 percent, while Toyota is flat.

In the tech space, Advantest is gaining almost 3 percent, Screen Holdings is adding more than 1 percent and Tokyo Electron is up almost 2 percent. In the banking sector, Mitsubishi UFJ Financial and Sumitomo Mitsui Financial are losing almost 1 percent each, while Mizuho Financial is down 0.5 percent.

The major exporters are mostly higher. Mitsubishi Electric is gaining more than 1 percent, while Sony and Canon are adding almost 1 percent each. Panasonic is down almost 1 percent.

Among the major losers, Nippon Steel and JFE Holdings are losing almost 5 percent each, while Sumitomo Metal Mining and Mitsui Mining & Smelting are down more than 4 percent each. Japan Steet and Kobe Steel are declining almost 4 percent each, while Impex, Tokai Carbon and Nexon are down more than 3 percent each.

Conversely, Taiyo Yuden is gaining almost 5 percent and Credit Saison is adding more than 4 percent, while Alps Alpine, Yamaha Motor, Toray Industries and Mazda Motor are up more than 3 percent each. GS Yuasa is rising almost 3 percent, while JTEKT, Fujitsu, Fuji Electric, Sharp, Oji Holdings, Teijin and Dentsu Group are all gaining more than 2 percent each.

In economic news, Japan posted a merchandise trade surplus of 255.3 billion yen in April, the Ministry of Finance said on Thursday. That exceeded expectations for a surplus of 140 billion following the downwardly revised 662.2 billion yen surplus in March (originally 663.7 billion yen). Exports surged 38.0 percent on year to 7.181 trillion yen, beating forecasts for a gain of 30.9 percent after climbing 16.1 percent in the previous month. Imports advanced an annual 12.8 percent to 6.925 trillion yen versus expectations for a gain of 8.8 percent and up from 5.8 percent a month earlier.

Separately, the Cabinet Office said on Thursday that the value of core machine orders in Japan was up a seasonally adjusted 3.7 percent on month in March, coming in at 798.1 billion yen. That missed expectations for an increase of 6.4 percent following the 8.5 percent decline in February. On a yearly basis, core machine orders fell 2.0 percent – beating forecasts for a fall of 2.6 percent after sinking 7.1 percent a month earlier.

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

Elsewhere in Asia, China, Hong Kong, Taiwan and South Korea are lower by between 0.4 and 1.0 percent each. New Zealand, Malaysia, Indonesia and Singapore are higher by between 0.1 and 0.9 percent each.

On Wall Street, stocks ended notably lower on Wednesday, as worries about inflation and the bitcoin’s sharp plunge weighed on the market, despite staging a fairly strong recovery from an early setback. But the market recovered after the bitcoin rebounded from the session’s lows.

The major averages saw further downside going into the close, ending the day just off their lows of the session. The Dow closed at 33,896.04 with a loss of 164.62 points or 0.48 percent. The S&P 500 finished with a loss of 12.15 points or 0.29 percent at 4,115.68, while the Nasdaq settled with a small loss of 3.90 points or 0.03 percent at 13,299.74.

The major European markets also all moved to the downside on the day. The U.K.’s FTSE 100 shed 1.19 percent, Germany’s DAX declined 1.77 percent and France’s CAC 40 ended 1.43 percent lower.

Crude oil prices declined sharply on Wednesday, weighed down by an increase in U.S. crude stockpiles, and on worries about outlook for energy demand from Asian countries. West Texas Intermediate Crude oil futures for June ended down $2.13 or 3.3 percent at $63.36 a barrel.