Asian Markets Mostly Lower

Asian stock markets are trading mostly lower on Friday, following the firmly negative cues overnight from Wall Street, as traders reacted to rising inflation worries and renewed concerns about the impact of Chinese real estate major Evergrande’s debt woes. Traders also remain concerned about the coronavirus situation in the region and other countries, particularly the U.S., which is hindering economic activity. Asian markets ended mixed on Thursday.

Evergrande failed to pay $180 million in interest debt to foreign investors after missing two deadlines.

Traders largely shrugged off news that lawmakers in Washington avoided a government shutdown, with the Senate and the House both passing a stopgap spending bill. However, the U.S. still faces a potential default amid an impasse over raising the debt ceiling.

Treasury Secretary Janet Yellen has warned of “catastrophic economic consequences” if the debt ceiling is not raised by October 18th.

The Australian stock market is sharply lower on Friday, giving up the sharp gains in the previous session, with the benchmark S&P/ASX 200 staying below the 7,200 level, following the firmly negative cues overnight from Wall Street, dragged by materials, financials and energy stocks. Rising inflation and renewed concerns about the impact of Chinese real estate major Evergrande’s debt woes are weighing on market sentiment, even as the country struggles to contain the domestic coronavirus situation, primarily in New South Wales and Victoria.

NSW has reported 864 new local cases of COVID-19 and fifteen deaths on Thursday. Victoria recorded 1,143 new locally acquired cases and three deaths, with active cases now totalling 10,944 across the state.

The benchmark S&P/ASX 200 Index is losing 153.90 points or 2.10 percent to 7,178.30, after hitting a low of 6,157.90 earlier. The broader All Ordinaries Index is down 154.60 points or 2.03 percent to 7,475.10. Australian markets ended sharply higher on Thursday.

Among major miners, BHP Group and OZ Minerals are losing almost 2 percent each, while Mineral Resources is declining more than 4 percent, Fortescue Metals is down 1.5 percent and Rio Tinto is lower by almost 3 percent.

Oil stocks are mostly lower. Oil Search is losing more than 3 percent, Woodside Petroleum is down almost 1 percent and Origin Energy is declining more than 1 percent, while Santos and Beach energy are lower by almost 4 percent each.

Among tech stocks, Xero is losing almost 1 percent, while Appen is gaining almost 1 percent. WiseTech Global and Afterpay are edging up 0.1 percent.

Among the big four banks, ANZ Banking is losing 1.5 percent and Commonwealth Bank is declining more than 3 percent, while National Australia Bank and Westpac are down more than 2 percent each.

Gold miners are higher. Newcrest Mining and Resolute Mining are gaining more than 1 percent each, while Evolution Mining is adding more than 4 percent, Gold Road Resources is up almost 2 percent and Northern Star Resources is higher by almost 4 percent.

In economic news, the manufacturing sector in Australia continued to expand in September, and at a faster pace, the latest survey from Markit Economics showed on Friday with a manufacturing PMI score of56.8. That’s up from 52.0 in August and it moves further above the boom-or-bust line of 50 that separates expansion from contraction.

Additionally, the value of owner-occupied home loans in Australia was down a seasonally adjusted 6.6 percent on month in August, the Australian Bureau of Statistics said on Friday – coming in at A$21.26 billion. That missed forecasts for a decline of 2.0 percent following the 0.4 percent drop in July. Investment lending was up 1.5 percent on month at A$9.49 billion, slowing from 1.8 percent in the previous month. So overall lending was at A$30.76 billion, down 4.3 percent on month. On a yearly basis, overall lending was up 47.4 percent, owner-occupied lending jumped 33.5 percent and investment lending skyrocketed 92.2 percent. Fixed term loans were down 2.5 percent on month and up 38.9 percent on year at A$1.93 billion.

In the currency market, the Aussie dollar is trading at $0.723 on Friday.

The Japanese stock market is trading sharply lower on Friday, extending the losses in the previous four sessions, with the benchmark Nikkei 225 just below the 28,900 level, following the firmly negative cues overnight from Wall Street, as traders reacted to rising inflation worries and renewed concerns about the impact of Chinese real estate major Evergrande’s debt woes.

The benchmark Nikkei 225 Index closed the morning session at 28,861.83, down 590.83 points or 2.01 percent, after touching a high of 28,837.09 earlier. Japanese shares closed modestly lower on Thursday.

Market heavyweight SoftBank Group is edging down 0.3 percent and Uniqlo operator Fast Retailing is losing almost 3 percent. Among automakers, Honda and Toyota are losing more than 1 percent each.

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

Among major exporters, Panasonic is losing almost 3 percent, Canon is down almost 2 percent, Mitsubishi Electric is declining 1.5 percent and Sony is lower by more than 2 percent.

Among the other major losers, Sumitomo Chemical, Sojitz and Mitsui Chemicals are losing almost 5 percent each, while Kawasaki Heavy Industries, Sumco and Keisei Electric Railway are down more than 4 percent each. Tokai Carbon, Daikin Industries, JGC Holdings, Itochu, Mitsubishi and Hino Motors are all lower by almost 4 percent each. Marubeni, J. Front Retailing and JTEKT are declining more than 3 percent each.

Conversely, Rakuten Group is gaining more than 3 percent.

In economic news, the unemployment rate in Japan came in at a seasonally adjusted 2.8 percent in August, the Ministry of Internal Affairs and Communications said on Friday. That was unchanged from the July reading, although it exceeded expectations for a rate of 2.9 percent. The jobs-to-applicant ratio was 1.14, matching forecasts and down from 1.15 in the previous month. The participation rate was 62.4 percent, in line with expectations and down from 62.5 percent a month earlier.

Meanwhile, the manufacturing sector in Japan continued to expand in September, albeit at a slower rate, the latest survey from Jibun Bank showed on Friday with a manufacturing PMI score of 51.5. That’s down from 52.7 in August although it remains above the boom-or-bust line of 50 that separates expansion from contraction.

Additionally, large manufacturing in Japan posted some improvement in the third quarter of 2021, the Bank of Japan’s quarterly Tankan Survey of business sentiment showed on Friday with a diffusion index score of +18. That beat forecasts for a reading of +13 and was up from a score of +14 three months ago. The outlook came in at +14, missing expectations for +15 but up from +13 in the previous quarter. Large all industry capex is now seen higher by 10.1 percent, beating forecasts for a gain of 9.1 percent and up from 9.6 percent in the previous three months.

In the currency market, the U.S. dollar is trading in the lower 111 yen-range on Friday.

Elsewhere in Asia, Taiwan is losing 1.5 percent, while Singapore and South Korea are down 1.3 percent each. Hong Kong, Malaysia and Indonesia are lower by between 0.3 and 0.7 percent each. New Zealand is flat. Chinese markets are closed for a week for the Golden Week holiday.

On Wall Street, stocks moved sharply lower over the course of the trading session on Thursday, following the mixed performance seen in the previous session. The Dow tumbled to a three-month closing low, while the Nasdaq and the S&P 500 both ended the day at their lowest closing levels in over two months.

The Dow plunged 546.80 points or 1.6 percent to 33,843.92 and the S&P 500 slumped 51.92 points or 1.2 percent to 4,307.54, while the Nasdaq spent the day bouncing back and forth across the unchanged line before closing down 63.86 points or 0.4 percent at 14,448.58.

The major European markets all also moved to the downside on the day. While the U.K.’s FTSE 100 Index dipped by 0.3 percent, the French CAC 40 Index and the German DAX Index slid by 0.6 percent and 0.7 percent, respectively.

Crude oil futures settled higher Thursday, lifted by reports that China has ordered state-owned energy companies to secure winter supplies. West Texas Intermediate Crude oil futures for November ended higher by $0.20 or 0.3 percent at $75.03 a barrel.

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