Asian Markets Mostly Higher In Cautious Trades

Asian stock markets are trading mostly higher on Wednesday, following the mixed cues from global markets overnight, as traders remain cautious ahead of key economic events that are likely to affect the outlook for interest rates. The first decrease in new Covid infections in more than a week in China is generating some positive sentiment. Asian Markets closed mostly higher on Tuesday.

US Fed Chair Jerome Powell’s speech on U.S. economic outlook and labor market at an event in Washington are expected to provide additional cues on the outlook for interest rates.

Officials in China have defended the zero-Covid policy at a press briefing on Tuesday but said lockdowns would be lifted “as quickly as possible.”

The Australian stock market pares early losses to be modestly higher on Wednesday, extending the gains in the previous session, with the benchmark S&P/ASX 200 staying below the 7,300 level, following the mixed cues from global markets overnight, with particular strength in mining stocks amid improving base metal prices, partially offset by weakness in energy stocks.

The benchmark S&P/ASX 200 Index is gaining 14.30 points or 0.20 percent to 7,267.60, after touching a high of 7,276.90 earlier. The broader All Ordinaries Index is up 19.40 points or 0.26 percent to 7,461.40. Australian stocks ended modestly higher on Tuesday.

Among major miners, Fortescue Metals and OZ Minerals are edging up 0.1 to 0.2 percent each, while Mineral Resources is gaining almost 4 percent, BHP Group is adding almost 2 percent and Rio Tinto is up almost 1 percent.

Oil stocks are lower. Santos and Origin Energy are losing almost 1 percent each, while Woodside Energy is declining almost 2 percent and Beach energy is flat.

In the tech space, Zip is gaining almost 1 percent and Xero is adding more than 1 percent, while WiseTech Global is edging down 0.5 percent and Appen is losing almost 5 percent. Afterpay owner Block is flat

Among the big four banks, National Australia Bank and ANZ Banking are edging down 0.3 to 0.4 percent each, while Commonwealth Bank is edging up 0.1 percent. Westpac is flat.

Among gold miners, Northern Star Resources is gaining more than 1 percent, Newcrest Mining is adding 1.5 percent, Evolution Mining is advancing almost 2 percent, Gold Road Resources up almost 1 percent and Resolute Mining is rising almost 3 percent.

In economic news, private sector credit in Australia was up 0.6 percent on month in October, the Reserve Bank of Australia said on Wednesday – in line with expectations and slowing from 0.7 percent in September. On a yearly basis, credit jumped 9.5 percent – also matching forecasts and up from 9.4 percent in the previous month.

The total number of building permits issued in Australia was down a seasonally adjusted 6.0 percent on month in October, the Australian Bureau of Statistics or ABS said on Wednesday – coming in at 15,382. That missed expectations for a decline of 1.8 percent following the 5.8 percent contraction in September. On a yearly basis, permits were down 6.4 percent after tumbling 13.0 percent in the previous month. The seasonally adjusted estimate for the value of total building approved fell 0.2 percent in October, following a 7.1 percent decrease in September.

The ABS also said the value of construction work done in Australia was up a seasonally adjusted 2.2 percent on quarter in the third quarter of 2022, coming in at A$54.787 billion. That exceeded expectations for an increase of 1.5 percent following the 3.8 percent contraction in the three months prior. On a yearly basis, construction work done rose 1.1 percent.

In the currency market, the Aussie dollar is trading at $0.670 on Wednesday.

The Japanese stock market is significantly lower in choppy trading on Wednesday, extending the losses in the previous three sessions, with the Nikkei 225 falling below the 27,900 level, following the mixed cues from global markets overnight, with weakness in technology and financial stocks. Release of domestic data showing a sharper-than-expected dip in industrial production also weighed on market sentiment.

The benchmark Nikkei 225 Index closed the morning session at 27,858.16, down 169.68 points or 0.61 percent, after hitting a low of 27,802.71 earlier. Japanese stocks closed modestly lower on Tuesday.

Market heavyweight SoftBank Group is losing almost 1 percent and Uniqlo operator Fast Retailing is edging down 0.2 percent. Among automakers, Honda is edging up 0.4 percent, while Toyota is edging down 0.3 percent.

In the tech space, Tokyo Electron and Screen Holdings are losing almost 1 percent each, while Advantest is declining more than 1 percent.

In the banking sector, Sumitomo Mitsui Financial is edging down 0.4 percent, Mizuho Financial is losing almost 1 percent and Mitsubishi UFJ Financial is declining more than 1 percent.

Among the major exporters, Sony is losing more than 2 percent, Canon is edging down 0.4 percent and Mitsubishi Electric is declining more than 1 percent, while Panasonic is gaining almost 1 percent.

Among the other major losers, Trend Micro is losing more than 3 percent and Hoya is declining almost 3 percent.

Conversely, IHI Corp. is gaining more than 4 percent.

In economic news, Industrial production in Japan was down a seasonally adjusted 2.6 percent on month in October, the Ministry of Economy, Trade and Industry said on Wednesday. That missed forecasts for a contraction of 1.5 percent following the 1.7 percent drop in September. On a yearly basis, industrial production rose 3.7 percent – also shy of expectations for a gain of 5 percent and slowing from 9.6 percent in the previous month.

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

Elsewhere in Asia, New Zealand is up 1.0 percent, while China, Hong Kong, South Korea, Taiwan and Indonesia are higher by between 0.1 and 0.4 percent each. Malaysia is bucking the trend and is down 0.2 percent. Singapore is relatively flat.

On Wall Street, stocks fluctuated over the course of the trading day on Tuesday following the sell-off seen to start the week. The Dow eventually ended the session nearly unchanged, while the Nasdaq and S&P 500 closed lower for the third straight session.

The Dow spent the day bouncing back and forth across the unchanged line before closing up 3.07 points or less than a tenth of a percent to 33,852.53. Meanwhile, the S&P 500 edged down 6.31 points or 0.2 percent to 10,983.78 and the Nasdaq slid 65.72 points or 0.6 percent to 10,983.78.

The major European markets also turned in a mixed performance on the day. While the German DAX Index edged down by 0.2 percent, the French CAC 40 Index inched up by 0.1 percent and the U.K.’s FTSE 100 Index rose by 0.5 percent.

Crude oil futures settled higher Tuesday, extending gains from the previous session on hopes that OPEC may trim production to support prices later this week. West Texas Intermediate Crude oil futures for January ended higher by $$0.96 or 1.2 percent at $78.20 a barrel.