Asian Markets Mixed Amid Cautious Trade

Asian stock markets are trading mixed on Wednesday, following the broadly negative cues overnight from Wall Street, as traders remain cautious amid fears surrounding high inflation and interest-rate hikes, with a senior US Fed official calling for several more rate hikes to combat ballooning inflation. Asian Markets closed mixed on Tuesday.

US Federal Reserve governor Christopher Waller was quoted as saying that he favored 50 basis point hikes at every meeting until there is a substantial reduction in inflation.

The Australian stock market is nearly hugging the unchanged line in choppy trading on Wednesday, after the losses in the previous session, with the benchmark S&P/ASX 200 staying above the 7,200 level, following the broadly negative cues overnight from Wall Street, with weakness in materials and energy stocks partially offset by gains in financial stocks.

The benchmark S&P/ASX 200 Index is gaining 1.70 points or 0.02 percent to 7,212.90, after touching a high of 7,238.20 earlier. The broader All Ordinaries Index is down 12.30 points or 0.17 percent to 7,442.90. Australian stocks ended significantly lower on Tuesday.

Among major miners, OZ Minerals is losing almost 2 percent and Mineral Resources is plunging more than 7 percent, while BHP Group and Fortescue Metals are gaining almost 1 percent each. Rio Tinto is flat.

Oil stocks are mostly lower. Woodside Energy is losing almost 1 percent and Beach energy is down almost 2 percent, while Santos is edging up 0.2 percent. Origin Energy is plummeting almost 15 percent after it slashed its annual earnings outlook as the price of wholesale energy soared.

In the tech space, WiseTech Global is losing 1.5 percent, Appen is edging down 0.3 percent, Xero is down more than 1 percent, Zip is declining more than 4 percent and Afterpay owner Block is slipping more than 3 percent.

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

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

In economic news, Australia’s gross domestic product expanded by an annualized 3.3 percent on year in the first quarter of 2022, the Australian Bureau of Statistics said on Wednesday. That beat expectations for an increase of 2.9 percent following the 4.2 percent gain in the three months prior. On a seasonally adjusted quarterly basis, GDP was up 0.8 percent – again exceeding forecasts for an increase of 0.5 percent after surging 3.4 percent in the previous three months.

Meanwhile, the manufacturing sector in Australia continued to expand in May, albeit at a slower pace, the latest survey from S&P Global revealed on Wednesday with a manufacturing PMI score of 55.7. That’s down from 58.8 in April, although it remains above the boom-or-bust line of 50 that separates expansion from contraction.

In the currency market, the Aussie dollar is trading at $0.718 on Wednesday.

The Japanese stock market is modestly higher on Wednesday, recouping the losses in the previous session, with the Nikkei 225 moving above the 27,400 level, despite the broadly negative cues overnight from Wall Street, with exporters and financial stocks supporting the market.

The benchmark Nikkei 225 Index closed the morning session at 27,472.49, up 192.69 points or 0.71 percent, after touching a high of 27,482.31 earlier. Japanese stocks closed modestly lower on Tuesday.

Market heavyweight SoftBank Group is flat and Uniqlo operator Fast Retailing is down almost 1 percent. Among automakers, Honda is gaining almost 3 percent and Toyota is adding more than 3 percent.

In the tech space, Screen Holdings is flat. Advantest is edging down 0.3 percent and Tokyo Electron is losing more than 1 percent.

In the banking sector, Mizuho Financial is gaining almost 2 percent, while Mitsubishi UFJ Financial and Sumitomo Mitsui Financial are adding more than 2 percent each.

Among the major exporters, Sony is gaining more than 1 percent, Mitsubishi Electric is adding almost 1 percent, Canon is advancing almost 2 percent and Panasonic is edging up 0.2 percent.

Among the other major gainers, IHI is surging 6.5 percent and NTN is gaining more than 5 percent, while Nissan Motor, Kawasaki Kisen Kaisha, Kawasaki Heavy Industries and Mitsubishi Heavy Industries are adding almost 5 percent each. Isuzu Motors, T&D Holdings, Fukuoka Financial, NSK and Nippon Suisan Kaisha are advancing more than 4 percent each, while JTEKT, Subaru, Alps Alpine and Yokohama Rubber are up almost 4 percent each.

Conversely, Daiichi Sankyo is losing more than 4 percent and Inpex is down 3.5 percent.

In economic news, the manufacturing sector in Japan continued to expand in May, albeit at a slower pace, the latest survey from Jibun Bank revealed on Wednesday with a manufacturing PMI score of 53.3. That’s down from 53.5 in April, although it remains above the boom-or-bust line of 50 that separates expansion from contraction.

In the currency market, the U.S. dollar is trading in the 129 yen-range on Wednesday.

Elsewhere in Asia, New Zealand, Singapore and South Korea are higher by between 0.4 and 0.6 percent each. Hong Kong, Malaysia and Taiwan are lower by between 0.1 and 0.7 percent each. China is relatively flat. Indonesia is closed for Pancasila Day holiday.

On Wall Street, stocks closed lower on Wall Street on Tuesday as concerns about soaring inflation and looming policy tightening by the Federal Reserve rendered the mood bearish.

The major averages all ended on a negative note despite recovering well from an early setback. The Dow ended the session with a loss of 222.84 points or 0.67 percent at 32,990.12, the S&P 500 drifted down 26.09 points or 0.63 percent to 4,132.15 and the Nasdaq ended down 49.74 points or 0.41 percent at 12,081.39.

The major European markets also moved to the downside on the day. Germany’s DAX tumbled 1.29 percent and France’s CAC 40 ended 1.43 percent down, while the U.K.’s FTSE 100 edged up marginally.

Crude oil prices bounced off a hit two-month high on Tuesday and finished modestly lower on reports that OPEC may suspend Russia’s participation in an oil production deal. West Texas Intermediate Crude oil futures ended lower by $0.40 or 0.35 percent at $114.67 a barrel after rallying to $119.98 a barrel earlier in the day.

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