Asian Markets Tumble Amid Global Sell-off

Asian stock markets are trading mostly lower on Monday, following the broadly negative cues from global markets on Friday, as traders reacted to US Fed Chair Jerome Powell’s highly anticipated remarks at the Jackson Hole economic symposium, which were seen as more hawkish than some had hoped. Powell said he expects to keep rates at higher levels, and that the bank’s efforts to combat inflation will cause “some pain.” Asian markets closed mostly higher on Friday.

In his prepared remarks, Powell acknowledged the central bank’s efforts to combat inflation will cause “some pain” but argued a failure to restore price stability would mean “far greater pain.”

Powell reiterated the Fed’s resolve to bring inflation back to its 2 percent target, declaring that the “economy does not work for anyone” without price stability. He added that the central bank would use its tools “forcefully” to bring demand and supply into better balance.

Powell noted lower inflation readings in July are welcome but said the Fed will need to see more than a single month’s improvement before it is confident that inflation is moving down.

The Australian stock market is sharply lower on Monday, giving up the gains in the previous three sessions, with the benchmark S&P/ASX 200 falling below the 7,000 mark, following the broadly negative cues from global markets on Friday, with weakness across all sectors as traders digested US Fed Chair Jerome Powell’s highly anticipated remarks at the Jackson Hole economic symposium, which were seen as more hawkish than some had hoped.

Traders also digested domestically data that showed Australia’s retail sales improved 1.3 percent in July compared to June, accelerating at the fastest pace in four months and exceeding forecasts for a 0.3 percent growth.

The benchmark S&P/ASX 200 Index is losing 150.40 points or 2.12 percent to 6,953.70, after hitting a low of 6,943.20 earlier. The broader All Ordinaries Index is down 163.80 points or 2.23 percent to 7,182.00. Australian stocks closed significantly higher on Friday.

Among the major miners, BHP Group is losing more than 1 percent, Mineral Resources is sliding almost 5 percent, Rio Tinto is slipping almost 2 percent, OZ Minerals is edging down 0.5 percent and Fortescue Metals is declining almost 3 percent after reporting a 40 percent drop in annual profit on weak iron ore prices, despite record shipments.

Oil stocks are mostly lower. Santos, Woodside Energy and Origin Energy are losing more than 2 percent each, while Beach energy is down almost 2 percent.

Among tech stocks, Xero and Appen is declining more than 4 percent each, while Zip is sliding almost 7 percent, Afterpay owner Block is plunging almost 8 percent and WiseTech Global is slipping 3.5 percent.

Gold miners are mostly lower, Gold Road Resources and Evolution Mining are declining almost 4 percent each, while Newcrest Mining is slipping almost 3 percent, Resolute Mining is sliding 4.5 percent and Northern Star Resources is losing almost 2 percent.

Among the big four banks, National Australia Bank, Westpac, Commonwealth Bank and ANZ Banking are all losing almost 2 percent each.

In other news, shares in A2 Milk are surging more than 8 percent after the infant formula maker posted strong double-digit earnings and sales growth for the full year. It also announced a share buyback.

In the currency market, the Aussie dollar is trading at $0.687 on Monday.

The Japanese stock market is tumbling on Monday, giving up the gains in the previous two sessions, with the Nikkei 225 plummeting 800 points to below the 27,900 level, following the global sell-off on Friday, with weakness across all sectors as traders digested US Fed Chair Jerome Powell’s highly anticipated remarks at the Jackson Hole economic symposium, which were seen as more hawkish than some had hoped.

The benchmark Nikkei 225 Index closed the morning session at 27,851.68, down 789.70 or 2.76 percent, after hitting a low of 27,788.12 earlier. Japanese shares ended notably higher on Friday.

Market heavyweight SoftBank Group is losing almost 4 percent and Uniqlo operator Fast Retailing is declining more than 3 percent. Among automakers, Honda is edging down 0.4 percent and Toyota is losing more than 1 percent.

In the tech space, Advantest is losing more than 4 percent, Tokyo Electron declining almost 5 percent and Screen Holdings is slipping almost 4 percent. In the banking sector, Sumitomo Mitsui Financial is down almost 1 percent and Mizuho Financial is edging down 0.3 percent, while Mitsubishi UFJ Financial is losing more than 1 percent.

The major exporters are weak, with Panasonic and Canon losing more than 1 percent each, while Mitsubishi Electric and Sony are declining almost 3 percent each.

Among the other major losers, M3 is plummeting almost 7 percent and Recruit Holdings is plunging almost 6 percent, while Terumo and Omron are losing more than 5 percent each. Yamaha and Daikin Industries are slipping almost 5 percent, while Keyence, Dentsu Group, Minebea Mitsumi, Fuji Electric and Yaskawa Electric are declining more than 4 percent each. Tokyo Electric Power is down almost 4 percent.

Conversely, there are no major gainers.

In the currency market, the U.S. dollar is trading in the mid-138 yen-range on Monday.

Elsewhere in Asia, South Korea and Taiwan are plunging 2.1 percent each, while Singapore and Indonesia are down 1.1 percent each. New Zealand, China and Hong Kong lower by between 0.3 and 0.7 percent each. Malaysia is bucking the trend and is up 0.3 percent.

On Wall Street, stocks moved sharply lower during trading on Friday with traders reacting negatively to remarks by Federal Reserve Chair Jerome Powell. The major averages more than offset the upward move seen over the two previous sessions, falling to their lowest levels in a month.

The major averages saw further downside going into the close, ending the session at their worst levels of the day. The Dow plunged 1,008.38 points or 3 percent to 32,283.40, the Nasdaq dove 497.56 points or 3.9 percent to 12,141.71 and the S&P 500 plummeted 141.46 points or 3.4 percent to 4,057.66.

The major European markets all also moved to the downside on the day. While the German DAX Index plunged 2.3 percent, the French CAC 40 Index slumped by 1.7 percent and the U.K.’s FTSE 100 Index fell by 0.7 percent.

Crude oil prices climbed higher on Friday, recovering well following early weakness after Fed Chair Jerome Powell said he expects to keep rates at higher levels. West Texas Intermediate Crude oil futures for October ended higher by $0.54 or about 0.6 percent at $93.06 a barrel, rebounding from a low of $91.10.

Market Analysis