Asian Markets Tracks Wall Street Lower

Asian stock markets are trading mostly lower on Friday, following the broadly negative cues from Wall Street overnight, as traders are now concerned about how quickly the US Fed will continue to lower interest rates next year after a report showed producer prices in the U.S. increased by more than expected in the month of November. Asian markets ended mixed on Thursday.

The Australian stock market is notably lower on Friday, extending the losses in the previous three sessions, following the broadly negative cues from Wall Street overnight. The benchmark S&P/ASX 200 is falling below the 8,300 level, with weakness across most sectors led by mining and technology stocks.

The stronger-than-expected Australian jobs data also led traders to scale back expectations for an interest rate cut in February.

The benchmark S&P/ASX 200 Index is losing 53.40 points or 0.64 percent to 8,276.90, after hitting a low of 8,263.50 earlier. The broader All Ordinaries Index is down 53.40 points or 0.62 percent to 8,533.50. Australian markets ended modestly lower on Thursday.

Among major miners, BHP Group is losing more than 1 percent and Mineral Resources is edging down 0.2 percent, while Rio Tinto and Fortescue Metals are declining more than 2 percent each.

Oil stocks are mostly higher. Woodside Energy is edging up 0.5 percent and Beach energy gaining 1.5 percent, while Origin Energy is losing almost 1 percent. Santos is flat.

Among tech stocks, Zip and WiseTech Global are slipping almost 1 percent each, while Afterpay-owner Block is losing more than 4 percent and Xero is down more than 1 percent. Appen is gaining almost 2 percent.

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

Gold miners are mostly lower. Evolution Mining is losing almost 4 percent, Northern Star Resources is declining more than 2 percent, Gold Road Resources is sliding almost 3 percent, Newmont is down more than 1 percent and Resolute Mining is slipping more than 4 percent after announcing a final settlement payment to the government of Mali.

In other news, shares in Insignia Financial are surging more than 6 percent after the wealth manager confirmed the receipt of a $2.68 billion non-binding takeover offer from private equity firm Bain Capital.

Shares in Iress are climbing almost 6 percent after the software company reaffirmed its earnings guidance for fiscal year 2024.

In the currency market, the Aussie dollar is trading at $0.636 on Friday.

Snapping a four-session winning streak, the Japanese stock market is significantly lower on Friday, following the broadly negative cues from Wall Street overnight. The benchmark Nikkei 225 is falling below the 39,500 level, with weakness across most sectors led by index heavyweights, technology and financial stocks.

The benchmark Nikkei 225 Index closed the morning session at 39,360.43, down 488.71 points or 1.23 percent, after hitting a low of 39,247.41 earlier. Japanese stocks closed significantly higher on Thursday.

Market heavyweight SoftBank Group is gaining almost 1 percent, while Uniqlo operator Fast Retailing is losing more than 2 percent. Among automakers, Honda is edging down 0.5 percent and Toyota is losing more than 1 percent.

In the tech space, Screen Holdings and Tokyo Electron are losing almost 3 percent each, while Advantest is gaining almost 3 percent.

In the banking sector, Mitsubishi UFJ Financial and Mizuho Financial are edging down 0.2 to 0.5 percent each, while Sumitomo Mitsui Financial is losing almost 1 percent.

Among major exporters, Mitsubishi Electric and Canon are losing almost 1 percent each, while Sony is declining 2.5 percent and Panasonic is edging down 0.2 percent.

Among other major losers, IHI is declining more than 4 percent, Kawasaki Heavy Industries is losing almost 4 percent and Mitsubishi Heavy Industries is down more than 3 percent, while Omron, Daiichi Sankyo, Recruit Holdings and Japan Exchange Group are slipping almost 3 percent each.

Conversely, Oji Holdings is soaring almost 11 percent and Sharp is gaining more than 3 percent, while DeNA and Konica Minolta are adding almost 3 percent each.

In economic news, large manufacturing in Japan accelerated slightly in the third quarter of 2024, the Bank of Japan’s quarterly Tankan Survey of business sentiment showed on Friday with a diffusion index score of +14. That beat forecasts for a reading of +13, which would have been unchanged from three months earlier. The outlook came in at +13, easing from +14 in the previous quarter.

The large non-manufacturers index came in at +33, beating forecasts for +28 and down from +34. The outlook was +28, down from +33 three months earlier. The medium manufacturing index was at +11 with an outlook of +8, while the medium non-manufacturing index was at +22 with an outlook of +15. The small manufacturing index was at +1, while the small non-manufacturing index was at +16.

Large industry capex is seen higher by 11.3 percent, beating forecasts for 9.6 percent and up from 10.6 percent in Q3. Small industry capex was up 4.0 percent, accelerating from 2.6 percent in the three months prior.

In the currency market, the U.S. dollar is trading in the higher 152 yen-range on Friday.

Elsewhere in Asia, Hong Kong and China are down 1.8 and 1.5 percent, respectively. South Korea, Indonesia and Taiwan are lower by between 0.1 and 0.3 percent each. New Zealand, Singapore and Malaysia are higher by between 0.2 and 0.4 percent each

On Wall Street, stocks recovered from an early pullback during trading on Thursday but moved back to the downside over the course of the session. With the downward move, the Dow closed lower for the sixth consecutive session.

The major averages fell to new lows for the session going into the close of trading. The Dow slid 234.44 points or 0.5 percent to 43,914.12, the Nasdaq declined 132.05 points or 0.7 percent to 19,902.84 and the S&P 500 fell 32.94 points or 0.5 percent to 6,051.25.

Meanwhile, the major European markets ended the day little changed after the European Central Bank cut interest rates by a quarter point. While the French CAC 40 Index closed just below the unchanged line, the U.K.’s FTSE 100 Index and the German DAX Index both crept up by 0.1 percent.

Crude oil prices closed lower Thursday after three days of gains after the International Energy Agency’s forecast that the oil market will see excess supply next year. West Texas Intermediate Crude oil futures for January fell $0.27 or 0.4 percent at $70.02 a barrel.

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