Asian Markets Trade Mixed

Asian stock markets are trading mixed on Tuesday, following the positive cues from Wall Street overnight, amid optimism about the outlook for interest rates, after the US Fed’s latest projections hinted at three rate cuts early next year. However, several Fed officials have subsequently pushed back on investor hopes that rate cuts by the central bank are imminent. Asian markets closed mostly lower on Monday.

Markets are awaiting the release of U.S. inflation report later this week for more clarity on the Fed’s rate path and economic outlook.

Recouping the losses in the previous session, the Australian stock market is notably higher on Tuesday, following the broadly positive cues from Wall Street overnight. The benchmark S&P/ASX 200 is staying well above the 7,400 level, with gains across most sectors, led by mining and energy stocks.

The benchmark S&P/ASX 200 Index is gaining 58.60 points or 0.79 percent to 7,485.00, after touching a high of 7,492.10 earlier. The broader All Ordinaries Index is up 60.60 points or 0.79 percent to 7,710.20. Australian stocks closed modestly lower on Monday.

Among the major miners, BHP Group and Rio Tinto are edging up 0.1 to 0.4 percent each, while Fortescue Metals and Mineral Resources are gaining more than 1 percent each.

Oil stocks are mostly higher. Woodside Energy is gaining more than 1 percent, Beach energy is advancing more than 2 percent, Santos is edging up 0.3 percent and Origin Energy is adding almost 2 percent.

Among tech stocks, WiseTech Global is gaining almost 1 percent and Xero is up more than 1 percent, while Appen is declining more than 2 percent, Zip is slipping almost 3 percent and Afterpay owner Block is edging down 0.3 percent.

Gold miners are mostly higher. Northern Star resources is gaining 1.5 percent and Gold Road Resources is up almost 1 percent, while Evolution Mining and Newmont are adding almost 1 percent each. Resolute Mining is flat.

Among the big four banks, Commonwealth Bank and National Australia Bank are gaining almost 1 percent each, while Westpac and ANZ Banking are edging up 0.4 percent each.

In other news, shares in G8 Education are soaring almost 12 percent after the childcare operator showed a marked improvement in the second half of 2023 amid cost discipline.

In economic news, the Reserve Bank of Australia will on Tuesday release the minutes from its December 5 meeting. At the meeting, the policy board of the RBA decided to maintain the cash rate target at 4.35 percent. The board also retained the interest rate paid on Exchange Settlement balances at 4.25 percent. At the November meeting, the bank had lifted the rate by 25 basis points to a 12-year high, ending a four-session long pause.

In the currency market, the Aussie dollar is trading at $0.672 on Tuesday.

Recouping the losses the previous session, the Japanese stock market is slightly higher on Tuesday, with the Nikkei 225 moving to a tad near the 32,800 level, following the broadly positive cues from Wall Street overnight, as traders cautiously await details of the Bank of Japan’s final monetary policy meeting of the year.

There is speculation the BoJ could change its forward guidance on interest rates or provide signals on policy change. Most economists expect the BOJ to ditch negative interest rates by the end of next year.

The benchmark Nikkei 225 Index closed the morning session at 32,799.78, up 40.80 points or 0.12 percent, after hitting a low of 32,654.43 and high of 32,840.27 earlier. Japanese shares ended notably lower on Monday.

Market heavyweight SoftBank Group is edging down 0.5 percent, while Uniqlo operator Fast Retailing is edging up 0.4 percent. Among automakers, Honda is edging down 0.4 percent and Toyota is losing almost 1 percent.

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

In the banking sector, Sumitomo Mitsui Financial is edging up 0.2 percent, while Mitsubishi UFJ Financial is losing almost 1 percent and Mizuho Financial is edging down 0.3 percent.

The major exporters are mostly lower. Panasonic is losing almost 2 percent, while Sony and Mitsubishi Electric is declining more than 1 percent each. Canon is gaining more than 1 percent.

Among the other major losers, Nippon Steel is losing 4.5 percent and Central Japan Railway is declining more than 3 percent.

Conversely, Lasertec and NH Foods are gaining almost 3 percent each.

In other news, shares in Nippon Steel are gaining almost 4 percent after news that it would acquire US Steel for $14.9 billion.

In the currency market, the U.S. dollar is trading in the higher 143 yen-range on Tuesday.

Elsewhere in Asia, Hong Kong, South Korea and Taiwan are lower by between 0.1 and 0.6 percent each, while China, Singapore and Indonesia, are higher by between 0.1 and 0.2 percent each. New Zealand and Malaysia are relatively flat.

On Wall Street, stocks moved mostly higher over the course of the trading session on Monday, adding to the strong gains last week. The Nasdaq and the S&P 500 climbed firmly into positive territory, although the narrower Dow ended the day little changed.

While the Dow inched up 0.86 points or less than a tenth of a percent to 37,306.02, the Nasdaq rose 21.37 points or 0.5 percent to 4,740.56 and the S&P 500 climbed 90.89 points or 0.6 percent to 14,904.81.

Meanwhile, the major European markets turned in a mixed performance on the day. While the U.K.’s FTSE 100 Index climbed by 0.5 percent, the French CAC 40 Index declined by 0.4 percent and the German DAX Index slid by 0.6 percent.

Crude oil prices rose sharply on Monday on rising tensions in the Middle Ease due to recent attacks on ships crossing the Red Sea, which have raised supply concerns. West Texas Intermediate Crude oil futures for January ended higher by $1.04 or 1.44 percent at $72.47 a barrel.

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