Asian Markets Track Wall Street Lower

Asian stock markets are trading mostly lower on Wednesday, following the broadly negative cues from Wall Street overnight, as some traders looked to cash in on recent strength in the markets and booked some profits. The rising tensions in the Middle East and reports about China’s extensive drills around Taiwan are also hurting market sentiment. Asian markets closed mostly higher on Tuesday.

On the interest rate front, while hopes the US Fed will lower rates by another 50 basis points next month have largely evaporated, optimism the central bank will cut rates by 25 basis points remains.

CME Group’s FedWatch Tool is currently indicating a 92.2 percent chance the Fed will cut rates by a quarter point at its November meeting.

Australian shares are trading slightly lower on Wednesday, giving up some of the gains in the previous two sessions, with the benchmark S&P/ASX 200 falling below the 8,300 level, following the broadly negative cues from Wall Street overnight, with weakness in iron ore miners, energy and technology stocks were nearly offset by gains in gold miners and financial stocks.

The benchmark S&P/ASX 200 Index is losing 9.40 points or 0.11 percent to 8,309.00, after hitting a low of 8,274.30 earlier. The broader All Ordinaries Index is down 17.00 points or 0.20 percent to 8,581.60. Australian stocks ended significantly higher on Tuesday.

Among major miners, BHP Group and Rio Tinto are losing almost 2 percent each, while Mineral Resources is declining more than 3 percent. Fortescue Metals is flat.

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

In the tech space, WiseTech Global is slipping almost 2 percent and Appen is losing almost 5 percent, while Zip and Xero are declining more than 1 percent each. Afterpay owner Block is edging up 0.1 percent.

Among the big four banks, Commonwealth Bank, National Australia Bank and Westpac are gaining almost 1 percent each, while ANZ Banking is edging up 0.5 percent.

Among gold miners, Northern Star Resources and Gold Road Resources are gaining more than 1 percent each, while Evolution Mining is advancing more than almost 5 percent, Newmont is up more than 3 percent and Resolute Mining are adding 1.5 percent.

In the currency market, the Aussie dollar is trading at $0.668 on Wednesday.

The Japanese stock market is trading sharply lower on Wednesday, snapping a four-session winning streak, following the broadly negative cues from Wall Street overnight. The Nikkei 225 is falling more than 2 percent to below the 39,100 level, with weakness across all sectors led by index heavyweights and technology stocks.

The benchmark Nikkei 225 Index closed the morning session at 39,093.46, down 817.09 points or 2.05 percent, after hitting a low of 39,062.85 earlier. Japanese stocks ended significantly higher on Tuesday.

Market heavyweight SoftBank Group is losing more than 4 percent and Uniqlo operator Fast Retailing is edging down 0.2 percent. Among automakers, Honda is flat, while Toyota is edging down 0.4 percent.

In the tech space, Advantest is declining almost 2 percent, Tokyo Electron is plummeting more than 10 percent and Screen Holdings is plunging almost 10 percent.

In the banking sector, Sumitomo Mitsui Financial is edging down 0.1 percent, while Mizuho Financial and Mitsubishi UFJ Financial are edging up 0.1 to 0.5 percent each.

Among the major exporters, Panasonic and Canon are edging down 0.3 to 0.4 percent each, while Sony is declining almost 1 percent and Mitsubishi Electric is losing more than 1 percent.

Among other major losers, Lasertec is plummeting almost 14 percent, Disco is plunging more than 8 percent and Isetan Mitsukoshi is slipping more than 6 percent, while Socionext and Hoya are declining more than 5 percent each. Shiseido is sliding almost 5 percent, while Keyence and Ebara are losing almost 4 percent each. Renesas Electronics, Yaskawa Electric, Fuji Electric and J. Front Retailing are down more than 3 percent each.

Conversely, Taisei is surging more than 5 percent and Obayashi is gaining more than 5 percent.

In economic news, the value of core machine orders in Japan was down a seasonally adjusted 1.9 percent on month in August, the Cabinet Office said on Wednesday – coming in at 858.1 billion yen. That missed forecasts for a decline of 0.1 percent, which would have been the same as the July reading.

On a yearly basis, core machine orders dropped 3.4 percent – well shy of forecasts for an increase of 3.6 percent and down sharply from 8.7 percent in the previous month.For the third quarter of 2024, core machine orders are forecast to add 0.2 percent on quarter and 3.9 percent on year to 2,626.7 billion yen.

The total value of machinery orders received by 280 manufacturers operating in Japan decreased by 3.0 percent on month but climbed 15.5 percent on year in August at 2,961.4 billion yen.

In the currency market, the U.S. dollar is trading in the lower 149 yen-range on Wednesday.

Elsewhere in Asia, New Zealand and Taiwan are down 1.1 percent each, while Hong Kong, South Korea and Malaysia are higher by between 0.1 and 0.6 percent each. China, Singapore and Indonesia are lower by between 0.1 and 0.3 percent each.

On the Wall Street, stocks came under considerable selling pressure over the course of the trading day on Tuesday after moving to the upside early in the session. The major averages all moved notably lower following the strong gains posted during Monday’s session.

The major averages fell to new lows late in the trading day before regaining some ground going into the close. The tech-heavy Nasdaq slumped 187.10 points or 1.0 percent to 18,315.59, the Dow slid 324.80 points or 0.8 percent to 42,740.42 and the S&P 500 fell 44.59 points or 0.8 percent to 5,815.26.

The major European markets all also moved to the downside on the day. While the French CAC 40 Index slumped by 1.1 percent, the U.K.’s FTSE 100 Index fell by 0.5 percent and the German DAX Index edged down by 0.1 percent.

Crude oil prices fell sharply on Tuesday as fears about supply disruptions faded on reports that Israel will avoid targeting Iran’s oil sites. West Texas Intermediate crude oil futures for November sank $3.25 or 4.4 percent at $70.58 a barrel.

Market Analysis