Asian Markets Mixed Amid Cautious Trades

Asian stock markets are mixed on Friday, following the broadly positive cues overnight from Wall Street, with bargain hunting providing a boost, especially among oversold technology stocks. Traders are optimistic about a global economic recovery from the pandemic after a drop in US initial jobless claims, offsetting inflation worries and fears about monetary easing. Asian markets ended mixed on Thursday.

However, traders remain cautious amid continuing concerns about the accelerating daily coronavirus infection rates in the region caused by highly contagious variants of the virus.

Australian stock market is slightly higher in choppy trading on Friday, extending the strong gains of the previous session, with the benchmark S&P/ASX 200 staying above the 7,000 mark, following the broadly positive cues overnight from Wall Street. Major miners and energy stocks are lower as commodity prices retreated, offset by gains in technology stocks.

The benchmark S&P/ASX 200 Index is gaining 0.8 points or 0.01 percent to 7,020.40, after touching a high of 7,056.40 and a low of 6,999.60 earlier. The broader All Ordinaries Index is up 1.40 points or 0.02 percent to 7,254.00. Australian markets ended notably higher on Thursday.

The major miners are lower. Fortescue Metals and OZ Minerals are down almost 2 percent each, while BHP Group is losing more than 1 percent and Rio Tinto is declining more than 2 percent. Mineral Resources is slumping almost 3 percent.

Oil stocks were lower after crude oil prices slumped. Among oil stocks, Oil Search is losing more than 2 percent and Santos is down more than 3 percent, while Woodside Petroleum and Beach energy are declining almost 2 percent each.

Among tech stocks, Afterpay is gaining almost 3 percent, WiseTech Global is up almost 2 percent and Xero is adding more than 5 percent, while Appen is losing almost 3 percent.

Among the big four banks, National Australia Bank and ANZ Banking are edging up 0.2 percent each, while Westpac is gaining almost 1 percent. Commonwealth Bank is edging down 0.4 percent.

Gold miners are mixed after gold prices edged up. Evolution Mining is losing more than 1 percent and Newcrest Mining is down almost 1 percent, while Resolute Mining is gaining more than 2 percent, Gold Road Resources is adding almost 1 percent and Northern Star Resources is edging up 0.5 percent.

In other news, shares in Kogan.com are plunging more than 12 percent after the online retailer issued an earnings downgrade due to issues with excess inventory and problems with its shipping costs.

EML Payments rallied more than 16 percent, gaining for a second day, after plunging nearly 50 percent the two days ago on fears of regulatory curbs on its Irish unit.

In economic news, the manufacturing sector in Australia continued to expand in May, and at a faster pace, the latest survey from IHS Markit Economics revealed on Friday, with a survey record manufacturing PMI score of 59.9. That’s up from 59.7 in April, and it moves further above the boom-or-bust line of 50 that separates expansion from contraction. The survey also showed that the services PMI eased to 58.2 from 58.8 in April and the composite fell to 58.1 from 58.9.

Separately, the Australian Bureau of Statistics said the value of retail sales in Australia was up a seasonally adjusted 1.1 percent on month in April, coming in at A$31.050 billion. That beat expectations for an increase of 0.5 percent following the final 1.3 percent growth in March. On a yearly basis, retail sales gained 25.1 percent in April following the 2.3 percent annual spike in March.

In the currency market, the Aussie dollar is trading at $0.776 on Friday.

The Japanese stock market is notably higher on Friday, extending the strong gains of the previous session, with the benchmark Nikkei 225 above the 28,200 level, following broadly positive cues overnight from Wall Street. The continuing concerns about the spike in daily domestic coronavirus infections and possible more restrictions and lockdowns are limiting the market’s upside.

The Japanese government is expected to add Okinawa to the areas under a COVID-19 state of emergency as infections are surging in the southern island prefecture.

The benchmark Nikkei 225 Index closed the morning session at 28,222.94, up 124.69 points or 0.44 percent, after touching a high of 28,411.56 earlier. Japanese shares closed slightly higher on Thursday.

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

In the tech space, Advantest is flat, Tokyo Electron is adding more than 1 percent and Screen Holdings is gaining almost 2 percent. In the banking sector, Mitsubishi UFJ Financial is losing almost 2 percent, Mizuho Financial is down almost 1 percent and Sumitomo Mitsui Financial is edging down 0.5 percent.

The major exporters are mixed. Canon and Sony are gaining almost 1 percent each, while Panasonic is losing almost 1 percent. Mitsubishi Electric is edging up 0.2 percent.

Among the other major gainers, Toppan printing is gaining more than 4 percent, CyberAgent is adding almost 4 percent and Recruit Holdings is up more than 3 percent. Olympus, Nexon, Toyota Tsusho and Suzuki Motor are gaining almost 3 percent.

Conversely, Showa Denko, Dowa Holdings and Inpex are losing more than 2 percent each, while T&D Holdings, Pacific Metals, Nippon Light Metal, West Japan Railway and Tokio Marine are down almost 2 percent.

In economic news, Japan fell further into deflation as overall consumer prices were down 0.4 percent on year, the Ministry of Internal Affairs and communications said on Friday – after slipping 0.2 percent in March. Core CPI, which excludes volatile food prices, was steady at -0.1 percent on year. On a seasonally adjusted monthly basis, overall inflation fell 0.4 percent and core CPI sank 0.5 percent.

Separately, the latest survey from Markit Economics revealed that the manufacturing sector in Japan continued to expand in May, albeit at a slower pace with a survey record manufacturing PMI score of 52.5. That’s down from 53.6 in April, although it remains above the boom-or-bust line of 50 that separates expansion from contraction. The survey also showed that the services PMI eased to 45.7 from 48.3 in April and the composite fell to 48.1 from 51.0.

In the currency market, the U.S. dollar is trading in the higher 108 yen-range on Friday.

Elsewhere in Asia, New Zealand, Taiwan and Indonesia are gaining between 0.3 and 0.6 percent each. Meanwhile, Shanghai, Hong Kong, South Korea and Malaysia are lower by between 0.2 and 0.9 percent each. Singapore is flat.

On Wall Street, stocks snapped a three-day losing streak and closed higher on Thursday, buoyed by data showing a drop in jobless claims last week. Technology stocks posted strong gains, contributing significantly to market’s strong close. Bitcoin’s rebound after a terrible setback in the previous session aided sentiment. A few encouraging earnings announcements helped as well.

The major averages all closed notably higher. The Dow came off day’s high of 34,233.40, but still closed with a fairly decent gain of 188.11 points or 0.55 percent at 34,084.15. The S&P 500 ended up by 43.44 points or 1.06 percent at 4,159.12, while the Nasdaq settled at 13,535.74, gaining 236 points or 1.77 percent.

The major European markets also closed on a strong note, rebounding well after a sell-off in the previous session. While the U.K.’s FTSE 100 climbed 1 percent, Germany’s DAX surged up 1.7 percent and France’s CAC 40 advanced 1.29 percent.

Crude oil prices fell sharply Thursday, extending losses to a third straight day as signs of progress in Iran nuclear talks raised expectations that global crude supply will see a surge in the near term. West Texas Intermediate Crude oil futures for June ended down by $1.31 or 2.1 percent at $62.05 a barrel on the expiration day.

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