Powell Comments Push Asian Markets Lower

Asian stock markets are trading mostly lower on Friday, tracking a sell-off on Wall Street overnight, driven by hawkish comments from US Federal Reserve Chief Jerome Powell that signaled prospects of faster and sharper interest rate hikes, including a 50-basis points raise. Asian markets ended mixed on Thursday.

While participating in an International Monetary Fund panel, Powell said he believes it would be appropriate to raise rates “a little more quickly” and predicted a 50 basis point rate hike would be on the table at the Fed’s May meeting.

The Australian stock market is sharply lower on Friday, snapping a five-session winning streak, with the benchmark S&P/ASX 200 falling below the 7,500 level, following the broadly negative cues overnight from Wall Street, with stocks across all sectors plunging after US Federal Reserve chair Jerome Powell indicated faster and higher interest rate hikes.

The benchmark S&P/ASX 200 Index is losing 122.80 points or 1.62 percent to 7,470.20, after hitting a low of 7,455.00 earlier. The broader All Ordinaries Index is down 122.30 points or 1.55 percent to 7,764.80. Australian markets ended modestly higher on Thursday.

Among major miners, Rio Tinto is losing more than 3 percent, Fortescue Metals is down more than 2 percent, OZ Minerals is sliding more than 5 percent, BHP Group is declining more than 4 percent and Mineral Resources is slipping almost 3 percent.

Oil stocks are lower. Woodside Petroleum is losing more than 2 percent, Beach energy is slipping almost 3 percent, Origin Energy is down more than 1 percent and Santos is declining almost 2 percent.

Among tech stocks, WiseTech Global is losing more than 1 percent, Zip is slipping more than 5 percent, Afterpay owner Block is sliding more than 6 percent, Xero is down almost 2 percent and Appen is declining more than 2 percent.

Among the big four banks, Westpac is losing more than 1 percent and Commonwealth Bank is declining almost 2 percent, while National Australia Bank and ANZ Banking are down almost 1 percent each.

Gold miners are weak after gold prices slumped overnight. Evolution Mining is losing almost 3 percent, Northern Star Resources is declining more than 3 percent, Newcrest Mining is slipping almost 2 percent and Gold Road Resources is down more than 2 percent. Resolute Mining is flat.

In economic news, the manufacturing sector in Australia continued to expand in April, and at a faster rate, the latest survey from S&P Global showed on Friday with a manufacturing PMI score of 57.9. That’s up from 57.7 in March, and it moves further above the boom-or-bust line of 50 that separates expansion from contraction. Also, the services PMI improved to 56.6 in April from 55.6 in March, while the composite rose to 56.2 from 55.1.

In the currency market, the Aussie dollar is trading at $0.734 on Friday.

The Japanese stock market is sharply lower on Friday, giving up some of the gains in the previous three sessions, with the benchmark Nikkei 225 losing 500 points to just above the 27,000 mark, following the broadly negative cues overnight from Wall Street, with losses across most sectors after US Federal Reserve chair Jerome Powell indicated faster and higher interest rate hikes to rein in inflation.

The benchmark Nikkei 225 Index closed the morning session at 27,033.33, down 519.73 points or 1.89 percent, after hitting a low of 26,904.38 earlier. Japanese shares closed sharply higher on Thursday.

Market heavyweight SoftBank Group is losing more than 3 percent and Uniqlo operator Fast Retailing is declining almost 2 percent. Among automakers, Honda is down more than 1 percent and Toyota is slipping almost 2 percent.

In the tech space, Advantest is sliding almost 2 percent, Screen Holdings is losing almost 1 percent and Tokyo Electron is declining almost 3 percent.

In the banking sector, Mizuho Financial and Sumitomo Mitsui Financial are losing almost 1 percent each, while Mitsubishi UFJ Financial is down more than 1 percent.

Among major exporters, Sony is slipping almost 3 percent, Panasonic is losing almost 2 percent, Canon is declining more than 1 percent and Mitsubishi Electric is down more than 2 percent.

Among the other major losers, Nissan Chemical is plunging almost 7 percent and Dowa Holdings is slipping more than 5 percent, while Sumitomo Metal Mining, Konica Minolta, Recruit Holdings and Seiko Epson are losing almost 5 percent each. Japan Steel Works and Ricoh are sliding more than 4 percent each, while M3, DeNA, Fujikura, Toho Zinc and Pacific Metals are down almost 4 percent each. Sumitomo Realty & Development is declining more than 3 percent.

Conversely, there are no major gainers.

In economic news, overall consumer prices in Japan climbed 1.2 percent on year in March, the Ministry of Internal Affairs and Communications said on Friday. That exceeded expectations for an increase of 1.0 percent and was up from the 0.9 percent gain in February. On a monthly basis, overall inflation was up 0.4 percent – unchanged from the previous month and in line with expectations. Core CPI was up 0.8 percent on year – also matching expectations and accelerating from 0.6 percent a month earlier. On a monthly basis, core CPI was steady at 0.2 percent on month.

Meanwhile, the manufacturing sector in Japan continued to expand in April, albeit at a slower rate, the latest survey from Jibun Bank showed on Friday with a manufacturing PMI score of 53.4. That’s down from 54.1 in March, although it remains above the boom-or-bust line of 50 that separates expansion from contraction. Also, the services PMI improved to 50.5 in April from 49.4 in March, while the composite rose to 50.9 from 49.3.

In the currency market, the U.S. dollar is trading in the higher 128 yen-range on Friday.

Elsewhere in Asia, South Korea is losing 1.1 percent and Hong Kong is down 1.0 percent, while New Zealand, China, Singapore, Malaysia and Taiwan are lower by between 0.1 and 0.7 percent each. Indonesia is bucking the trend and is up 0.1 percent.

On Wall Street, stocks showed a substantial downturn over the course of the trading session on Thursday, with the major averages pulling back sharply after showing a strong move to the upside in early trading. With the steep drop on the day, the Nasdaq fell to its lowest closing level in over a month.

After jumping by more than 330 points to a two-month intraday high, the Dow slumped 368.03 points or 1.1 percent to 34,792.76. The Nasdaq also plunged 278.41 points or 2.1 percent to 13,174.65, and the S&P 500 tumbled 65.79 points or 1.5 percent at 4,393.66.

Meanwhile, European stocks moved mostly higher on the day, although the U.K.’s FTSE 100 Index underperformed and ended the day roughly flat. The German DAX Index jumped by 1 percent and the French CAC 40 Index surged up by 1.4 percent.

Crude oil prices climbed higher Thursday, extending gains from the previous session amid concerns about global crude supply and strong demand in the U.S. West Texas Intermediate Crude oil futures for June ended higher by $1.60 or 1.6 percent at $103.79 a barrel.

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