Asian Markets Track Global Markets Lower

Asian stock markets are trading mostly lower on Wednesday, following the broadly negative cues from global markets overnight, as traders reacted to US Federal Reserve Chair Jerome Powell’s testimony before the Senate Banking Committee. Powell warned interest rates will likely remain higher for longer than previously expected to fight inflation. Asian markets closed mixed on Tuesday.

Citing stubbornly elevated inflation and stronger than expected economic data, Powell also said the Fed would be prepared to reaccelerate the pace of rate hikes and for a longer period if incoming data were to indicate that faster tightening is warranted.

“The historical record cautions strongly against prematurely loosening policy,” Powell said. “We will stay the course until the job is done.”

The Fed’s next monetary policy meeting is scheduled for March 21-22, with CME Group’s FedWatch Tool currently indicating a 70.5 percent chance of 50 basis point rate increase and a 29.5 percent chance of 25 basis point rate hike.

The Australian stock market is significantly lower on Wednesday, snapping a four-session winning streak, with the benchmark S&P/ASX 200 falling below the 7,300 level, following the broadly negative cues from global markets overnight, with weakness across most sectors, led by technology, mining and energy stocks.

The markets are reacting to US Federal Reserve Chair Jerome Powell’s highly anticipated semiannual monetary policy testimony before the Senate Banking Committee. Powell warned interest rates will likely remain higher for longer than previously expected to fight inflation.

The benchmark S&P/ASX 200 Index is losing 69.10 points or 0.94 percent to 7,295.60, after hitting a low of 7,288.70 earlier. The broader All Ordinaries Index is down 71.20 points or 0.94 percent to 7,491.50. Australian stocks ended notably higher on Tuesday.

Among major miners, BHP Group, Fortescue Metals and Rio Tinto are edging down 0.2 to 0.5 percent each, while Mineral Resources is losing almost 2 percent. OZ Minerals is edging up 0.1 percent.

Oil stocks are mostly lower. Woodside Energy is plunging 7.5 percent, while Beach energy and Santos are losing more than 1 percent each. Origin Energy is gaining almost 1 percent.

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

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

Among gold miners, Newcrest Mining, Gold Road Resources and Northern Star Resources are losing more than 3 percent each, while Evolution Mining is declining almost 5 percent and Resolute Mining is down almost 2 percent.

In the currency market, the Aussie dollar is trading at $0.658 on Wednesday.

The Japanese stock market is modestly higher on Wednesday, extending the gains in the previous three sessions, with the Nikkei 225 staying below the 27,400 level, despite the broadly negative cues from global markets overnight, aided by gains in technology stocks. Traders also reacted to domestic data that showed a record current account deficit in January.

The benchmark Nikkei 225 Index closed the morning session at 28,370.92, up 61.76 points or 0.22 percent, after touching a high of 28,431.15 earlier. Japanese stocks ended modestly higher on Tuesday.

Market heavyweight SoftBank Group is losing 1.5 percent, while Uniqlo operator Fast Retailing is gaining almost 1 percent. Among automakers, Honda is edging up 0.5 percent, while Toyota is edging down 0.1 percent.

In the tech space, Screen Holdings is gaining almost 2 percent, Advantest is adding more than 1 percent and Tokyo Electron is edging up 0.2 percent.

In the banking sector, Sumitomo Mitsui Financial, Mitsubishi UFJ Financial and Mizuho Financial are all edging down 0.1 to 0.4 percent each.

Among the major exporters, Canon, Panasonic and Mitsubishi Electric are edging up 0.2 to 0.4 percent each, while Sony is gaining almost 1 percent.

Among the other major gainers, NTN is gaining more than 3 percent and JTEKT is adding almost 3 percent.

Conversely, Nissan Motor is losing more than 3 percent and Sumitomo Metal Mining is declining almost 3 percent.

In economic news, overall bank lending in Japan was up 3.3 percent on year in February, the Bank of Japan said on Wednesday – coming in at 598.927 billion yen. That’s up from the 3.1 percent increase in January.

In the currency market, the U.S. dollar is trading in the higher 137 yen-range on Wednesday.

Elsewhere in Asia, Hong Kong is down 2.2 percent and South Korea is down 1.3 percent, while New Zealand, China, Singapore, Malaysia and Taiwan are lower by between 0.3 and 0.7 percent each. Indonesia is relatively flat.

On Wall Street, stocks moved sharply lower during trading on Tuesday with remarks by Federal Reserve Chair Jerome Powell renewing concerns about the outlook for interest rates. The major averages all showed significant moves to the downside after ending Monday’s trading narrowly mixed.

The major averages climbed off their worst levels late in the session but still posted steep losses. The Dow plunged 574.98 points or 1.7 percent at 32,856.46, the Nasdaq tumbled 145.40 points or 1.3 percent to 11,530.33 and the S&P 500 dove 62.05 points or 1.5 percent to 3,986.37.

The major European markets all also moved to the downside over the course of the session. While the U.K.’s FTSE 100 Index edged down by 0.1 percent, the French CAC 40 Index and the German DAX Index fell by 0.5 percent and 0.6 percent, respectively.

Crude oil prices tumbled Tuesday on renewed uncertainty about energy demand, while a surging greenback also weighed on the commodity. West Texas Intermediate Crude oil futures for April slumped $2.88 or 3.6 percent at $77.58 a barrel.