Asian Markets Trading Mostly Lower

Asian stock markets are trading mostly lower on Thursday, despite the positive cues from Wall Street overnight, as traders remain cautious and asses the global economic and monetary policy outlook after US inflation slows to below 5 percent for the first time two years. Traders worry the slowdown in the pace of price growth is partly due to the U.S. heading for a recession. Asian Markets closed mostly lower on Wednesday.

CME Group’s FedWatch Tool is currently indicating a 99.1 percent chance the Federal Reserve will leave interest rates unchanged at its next meeting in June.

“A positive consequence of the oncoming mild recession that we expect in H2 2023 is it should help ease price pressures,” said Oren Klachkin, Lead U.S. Economist at Oxford Economics.

The Australian stock market is modestly lower on Thursday, extending the losses in the previous two sessions, with the benchmark S&P/ASX 200 staying above the 7,200 level, despite the positive cues from Wall Street overnight, dragged by weakness in gold miners.

The benchmark S&P/ASX 200 Index is losing 21.20 points or 0.29 percent to 7,234.50, after hitting a low of 7,230.80 and a high of 7,266.50 earlier. The broader All Ordinaries Index is down 19.40 points or 0.26 percent to 7,432.90. Australian stocks ended slightly lower on Wednesday.

Among major miners, BHP Group and Rio Tinto are edging down 0.1 to 0.3 percent each, while Mineral Resources is gaining almost 4 percent. Fortescue Metals is flat.

Oil stocks are mostly higher. Santos, Beach energy and Woodside Energy are edging up 0.2 to 0.4 percent each, while Origin Energy is edging down 0.4 percent.

In the tech space, Xero and Zip are edging up 0.4 percent each, while WiseTech Global is gaining more than 1 percent and Appen is adding more than 2 percent. Afterpay owner Block is declining more than 3 percent

Among the big four banks, Commonwealth Bank is edging up 0.3 percent, while National Australia Bank is edging down 0.2 percent. ANZ Banking and Westpac are flat.

Among gold miners, Newcrest Mining and Evolution Mining are losing almost 1 percent each, while Gold Road Resources is down almost 2 percent and Resolute Mining is declining almost 4 percent. Northern Star Resources is flat.

In other news, shares in Allkem are soaring almost 15 percent after that lithium miner announced a $10 billion merger with US-listed company Livent.

Shares in GrainCorp are surging more than 6 percent after the agribusiness company lifted its earnings guidance despite posting lower half year profits.

In the currency market, the Aussie dollar is trading at $0.677 on Thursday.

The Japanese stock market is modestly lower on Thursday, extending the losses in the previous session, with the Nikkei 225 falling below the 29,100 level, despite the positive cues from Wall Street overnight, with weakness in market heavyweights and financial stocks.

The benchmark Nikkei 225 Index closed the morning session at 29,062.04, down 60.14 points or 0.21 percent, after hitting a low of 29,028.71 earlier. Japanese stocks closed notably lower on Wednesday.

Market heavyweight SoftBank Group is losing more than 1 percent and Uniqlo operator Fast Retailing is edging down 0.3 percent. Among automakers, Toyota is edging down 0.2 percent and Honda is losing almost 2 percent.

In the tech space, Screen Holdings is edging up 0.4 percent, Tokyo Electron is gaining more than 1 percent and Advantest is adding more than 3 percent.

In the banking sector, Mitsubishi UFJ Financial and Sumitomo Mitsui Financial are edging down 0.1 to 0.2 percent each, while Mizuho Financial is losing almost 1 percent.

Among the major exporters, Mitsubishi Electric, Canon and Sony are edging down 0.2 to 0.5 percent each, while Panasonic is gaining 1.5 percent.

Among the other major losers, Sumitomo Metal Mining and Kyowa Kirin are plummeting more than 11 percent each, while Kao is plunging almost 6 percent and Konica Minolta is losing almost 5 percent. IHI, Nippon Sheet Glass, Mitsui Mining & Smelting, Mitsubishi Heavy Industries, Mazda Motor and Asahi Kasei are down almost 3 percent each.

Conversely, Tokyu Fudosan is soaring 8.5 percent and Yamato Holdings is surging almost 6 percent, while Nisshin Seifun and FUJIFILM are gaining more than 5 percent each. Rakuten Group is adding 4.5 percent and ENEOS is up more than 3 percent.

In economic news, Japan had a current account surplus of 2.278 trillion yen in March, the Ministry of Finance said on Thursday – down 29.6 percent on year. That was shy of expectations for a surplus of 2.947 trillion yen and up from 2.197 trillion yen in February.

Imports were up 7.1 percent on year at 9.242 trillion yen, while exports rose 3.6 percent to 8.788 trillion yen for a trade deficit of 454.4 billion yen. The capital account saw a deficit of 67.4 billion yen in March, while the financial account had a surplus of 2.191 trillion yen.

Meanwhile, overall bank lending in Japan was up 3.2 percent on year in April, the Bank of Japan said on Thursday – coming in at 603.295 trillion yen. That exceeded expectations for an increase of 2.9 percent and was up from 3.0 percent in March.

In the currency market, the U.S. dollar is trading in the lower 134 yen-range on Thursday.

Elsewhere in Asia, New Zealand, Hong Kong, Singapore, Taiwan and Indonesia are lower by between 0.1 and 0.9 percent each, South Korea and Malaysia are up 0.4 and 0.1 percent, respectively. China is relatively flat.

On Wall Street, stock fluctuated over the course of the trading session on Wednesday after failing to sustain an initial move to the upside. While the tech-heavy Nasdaq maintained a positive bias throughout the session, the S&P 500 spent the day bouncing back and forth across the unchanged line.

The Nasdaq eventually showed a strong upward move on the day, jumping 126.89 points or 1.0 percent to 12,306.44. The S&P 500 also climbed 18.47 points or 0.5 percent to 4,137.64, while the narrower Dow bucked the uptrend and edged down 30.48 points or 0.1 percent to 33,531.33.

Meanwhile, the major European markets moved to the downside on the day. While the French CAC 40 Index slid by 0.5 percent, the German DAX Index declined by 0.4 and the U.K.’s FTSE 100 Index dipped by 0.3 percent.

Crude oil prices showed a notable move to the downside on Wednesday, giving back ground after closing high for three straight sessions. West Texas Intermediate for June delivery slumped $1.15 or 1.6 percent to $72.56 a barrel after peaking at $73.71 in the previous session.

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