Asian Markets Track Global Markets Lower

Asian stock markets are trading mostly lower on Thursday, following the broadly negative cues from global markets overnight, as traders are cautious as they reacted to the US Fed’s minutes from its latest monetary policy meeting and await the data on U.S. consumer price inflation later in the day. Asian Markets closed mixed on Wednesday.

The heightened concerns of Russia escalating its war in Ukraine and the tightening COVID curbs in China also weighed on sentiment.

Put together, the inflation data and the minutes are expected to provide some clues about the central bank’s likely stance on the size of interest rate hike next month.

The Fed’s minutes showed that members expect interest rates to remain high till prices come down and choose to give priority to the commitment to reign in stubbornly increasing inflation.

The members also lowered their projections for the economy and expect GDP to grow at just a 0.2 percent annualized pace in 2022 and just 1.2 percent in 2023, well below trend and big drop from 2021, which saw the strongest gains since 1984.

Meanwhile, some policymakers felt slowing the pace of tightening would be appropriate while assessing the effects of cumulative policy adjustments on growth and inflation.

The Australian stock market is modestly higher on Thursday, extending the slight gains in the previous session, with the benchmark S&P/ASX 200 moving up to nearly the 6,700 level, despite the broadly negative cues from global markets overnight, boosted by strong gains in financial and technology stocks.

The benchmark S&P/ASX 200 Index is gaining 13.00 points or 0.20 percent to 6,660.50, after touching a high of 6,683.70 earlier. The broader All Ordinaries Index is up 11.90 points or 0.17 percent to 6,854.20. Australian stocks ended slightly higher on Wednesday.

Among major miners, BHP Group and Mineral Resources are edging down 0.1 to 0.5 percent each, while Fortescue Metals is gaining more than 1 percent. Rio Tinto and OZ Minerals are edging up 0.2 percent each.

Oil stocks are mostly lower. Santos and Woodside Energy are edging down 0.3 to 0.5 percent each, while Origin Energy is down almost 1 percent. Beach energy is adding almost 1 percent.

In the tech space, Afterpay owner Block is gaining more than 4 percent, Appen is adding more than 2 percent and Xero is up almost 1 percent, while Zip is slipping more than 2 percent and WiseTech Global is down more than 1 percent.

Among the big four banks, National Australia Bank is gaining almost 4 percent and Westpac is surging more than 4 percent, while Commonwealth Bank and ANZ Banking are adding almost 3 percent each.

Among gold miners, Northern Star Resources and Newcrest Mining are gaining almost 1 percent each, while Evolution Mining is edging up 0.1 percent and Gold Road Resources is advancing more than 2 percent. Resolute Mining is flat.

In other news, shares in Qantas Airways are soaring more than 11 after said it expects to return to profitability in the first half amid rebounding demand and improving business conditions.

In the currency market, the Aussie dollar is trading at $0.627 on Thursday.

The Japanese stock market is modestly lower on Thursday, extending the losses in the previous three sessions, with the Nikkei 225 falling below the 26,300 level, following the broadly negative cues from global markets overnight, as traders remained cautious ahead of the release of key US inflation data later in the day that will provide cues on the outlook for interest rates.

Domestic data showing producer prices in Japan rose faster than expected in September also weighed on the market.

The benchmark Nikkei 225 Index closed the morning session at 26,260.25, down 136.58 points or 0.52 percent, after hitting a low of 26,244.93 earlier. Japanese stocks closed slightly lower on Wednesday.

Market heavyweight SoftBank Group is edging down 0.5 percent, while Uniqlo operator Fast Retailing is edging up 0.3 percent. Among automakers, Honda is edging down 0.5 percent and Toyota is flat.

In the tech space, Screen Holdings is gaining more than 1 percent, while Advantest and Tokyo Electron are advancing almost 2 percent each.

In the banking sector, Mitsubishi UFJ Financial and Mizuho Financial are flat, while Sumitomo Mitsui Financial is edging down 0.4 percent.

Among the major exporters, Canon is edging down 0.3 percent and Sony is down almost 1 percent, while Mitsubishi Electric and Panasonic are edging up 0.3 percent each.

Among the other major losers, Toho is losing more than 4 percent, while Daikin Industries, JGC Holdings and ANA Holdings are down almost 3 percent each.

Conversely, there are no major gaines.

In economic news, producer prices in Japan spiked 9.7 percent on year in September, the Bank of Japan said on Thursday. That far exceeded expectations for an increase of 8,8 percent and accelerated from the upwardly revised 9.4 percent increase in August (originally 9.0 percent). On a monthly basis, producer prices advanced 0.7 percent – again topping forecasts for 0.2 percent and up from the upwardly revised 0.4 percent in the previous month (originally 0.2 percent).

The value of overall bank lending in Japan was up 2.3 percent on year in September, the Bank of Japan said on Thursday – coming in at 590.536 trillion yen. That’s up from 1.9 percent in August. Excluding trusts, bank lending rose 2.6 percent on year to 513.986 trillion yen, while lending from trusts perked an annual 0.3 percent to 76.550 trillion yen. Lending from foreign banks climbed 2.7 percent to 3.834 trillion yen. For the third quarter of 2022, overall bank lending was up 2.0 percent on year.

In the currency market, the U.S. dollar is trading in the higher 146 yen-range on Thursday.

Elsewhere in Asia, Hong Kong, Singapore, South Korea and Taiwan are lower by between 1.1 and 1.2 percent each, while New Zealand and China are down 0.3 percent each. Malaysia and Indonesia are relatively flat.

On Wall Street, stocks failed to hold early gains and ended lower on Wednesday with traders reacting to the minutes from the Federal Reserve’s most recent policy meeting, and looking ahead to the crucial consumer price inflation data.

Despite spending much of the day’s trading session in positive territory, the major averages all ended on a negative note. The Dow ended the day with a loss of 28.34 points or 0.1 percent at 29,210.85, the S&P 500 ended lower by 11.81 points or 0.33 percent at 3,577.03 and the Nasdaq settled at 10,417.10, posting a loss of 9.09 points or 0.09 percent.

The major European markets closed weak, extending recent losses, as global growth concerns, rising interest rates and geopolitical tensions continued to weigh. The U.K.’s FTSE 100 drifted down 0.86 percent, Germany’s DAX declined 0.39 percent and France’s CAC 40 shed 0.25 percent.

Crude oil prices drifted lower on Wednesday, falling for a third straight session amid concerns about the outlook for demand due to slowing global growth after OPEC cut its demand forecast for this year. West Texas Intermediate Crude oil futures for November ended lower by $2.02 or 2.26 percent at $87.33 a barrel.

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