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 traders remained cautious ahead of the release of a key US inflation data later in the day that could influence the outlook for interest rates. Inflation fears due to the continued spike in crude oil prices also weighed on sentiment. Asian markets closed mixed on Tuesday.

Ahead of the data, the CME Group’s FedWatch Tool is currently indicating a 93.0 percent chance the Fed will leave interest rates unchanged, but also indicating a 40.4 percent chance of another quarter point rate hike in November.

The Australian stock market is significantly lower on Wednesday, giving up some of the gains in the previous two sessions, with the benchmark S&P/ASX 200 falling below the 7,200 level, following the broadly negative cues from Wall Street overnight, dragged by weakness in mining and technology stocks.

The benchmark S&P/ASX 200 Index is losing 60.30 points or 0.84 percent to 7,146.60, after hitting a low of 7,140.60 earlier. The broader All Ordinaries Index is down 64.10 points or 0.87 percent to 7,338.80. Australian stocks ended modestly higher on Tuesday.

Among major miners, Rio Tinto and BHP Group are losing almost 1 percent each, while Fortescue Metals is declining almost 2 percent and Mineral Resources is edging down 0.4 percent.

Oil stocks are mostly higher. Woodside Energy is gaining almost 1 percent and Santos is adding more than 1 percent, while Beach energy and Origin Energy are edging up 0.1 to 0.4 percent each.

In the tech space, Afterpay owner Block is gaining almost 1 percent and Appen is adding more than 1 percent, while Zip is losing 3.5 percent, Xero is declining more than 2 percent and WiseTech Global is down almost 2 percent.

Among the big four banks, Commonwealth Bank, Westpac and National Australia Bank are edging down 0.1 to 0.5 percent each, while ANZ Banking is flat.

Among gold miners, Northern Star Resources is declining more than 1 percent, Evolution Mining is losing almost 1 percent and Newcrest Mining is edging down 0.2 percent, while Gold Road Resources is edging up 0.1 percent and Resolute Mining is gaining more than 1 percent.

In the currency market, the Aussie dollar is trading at $0.640 on Wednesday.

The Japanese stock market is modestly lower on Wednesday, giving up some of the gains in the previous session, with the Nikkei 225 falling below the 32,700 level, following the broadly negative cues from Wall Street overnight, as traders remained cautious ahead of the release of a key US inflation data later in the day that could influence the outlook for interest rates.

The benchmark Nikkei 225 Index closed the morning session at 32,675.89, down 100.48 points or 0.31 percent, after hitting a low of 32,662.27 earlier. Japanese stocks ended significantly higher on Tuesday.

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

In the tech space, Advantest is losing more than 2 percent each, while Tokyo Electron is adding more than 1 percent. Screen Holdings is flat.

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

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

There are no other major losers.

Conversely, Yokohama Rubber is gaining more than 4 percent, while Sumitomo Pharma and Kawasaki Kisen Kaisha are adding more than 3 percent each. Idemitsu Kosan and Bridgestone are up almost 3 percent each.

In economic news, Producer prices in Japan were up 0.3 percent on month in August, the Bank of Japan said on Wednesday. That beat forecasts for an increase of 0.1 percent, which would have been unchanged from the July reading.

On a yearly basis, producer prices climbed 3.2 percent – in line with expectations and down from the downwardly revised 3.4 percent increase in the previous month (originally 3.6 percent). Export prices were up 0.5 percent on month and down 0.8 percent on year, the bank said, while import prices slumped 0.9 percent on month and 15.9 percent on year.

In the currency market, the U.S. dollar is trading in the lower 147 yen-range on Wednesday.

Elsewhere in Asia, New Zealand, China, Hong Kong, South Korea, Singapore, Malaysia, Taiwan and Indonesia are all lower by between 0.1 and 0.5 percent each.

On the Wall Street, stocks attempted to recover from initial weakness on Tuesday but moved back to the downside in the latter part of the session. The major averages all ended the day in negative territory, although the Dow posted a relatively modest loss.

The tech-heavy Nasdaq slumped 144.28 points or 1.0 percent to 13,773.61, largely offsetting the strong gain posted on Monday. The S&P 500 also fell 25.56 points or 0.6 percent to 4,461.90, while the Dow edged down 17.73 points or 0.1 percent to 34,645.99.

Meanwhile, the major European markets finished the day mixed. While the U.K.’s FTSE 100 Index rose 0.4 percent, the French CAC 40 Index fell by 0.4 percent and the German DAX Index slid by 0.5 percent.

Crude oil prices moved sharply higher on Tuesday to a 10-month closing high after the monthly report from (OPEC) showed the oil market may be a lot tighter than initially thought. West Texas Intermediate Crude oil futures for October ended higher by $1.55 or 1.8 percent at $88.84 a barrel.

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