Asian Markets Higher With Modest Gains

Asian Markets Higher With Modest Gains

April 22, 2019

Asian stock markets are mostly higher on Tuesday with modest gains after some of the markets recovered after a weak start. Investors are treading cautiously following the modest losses overnight on Wall Street on mixed corporate earnings results as well as on news that the U.S. and Japan have started trade talks in Washington aimed at creating a bilateral trade framework.

The Australian market recovered after a weak start and is modestly higher as investors digested mixed corporate earnings and production results. Banks and mining stocks are among the leading gainers, offsetting weakness in the oil sector.

The benchmark S&P/ASX 200 Index is adding 6.00 points or 0.10 percent to 6,257.40, after touching a low of 6,237.60 earlier. The broader All Ordinaries Index is up 5.90 points or 0.09 percent to 6,353.80. Australian shares closed flat on Monday.

The big four banks are modestly higher. ANZ Banking, Commonwealth Bank, Westpac and National Australia Bank are up in a range of 0.1 percent to 0.4 percent.

Among the major miners, Rio Tinto is advancing more than 1 percent and Fortescue Metals is adding 0.3 percent, while BHP Group is down 0.3 percent.

Rio Tinto reported a 14 percent decline in iron ore shipments for the first quarter of 2019 due to weather disruptions by Tropical Cyclone Veronica in March and a fire at Cape Lambert A in January. The mining giant also lowered its 2019 outlook for Pilbara shipments.

Lynas Corp., which is fending off a takeover bid from conglomerate Wesfarmers, reported a more than 32 percent increase in production of rare earths oxides during the March quarter. The company’s shares are rising more than 2 percent.

Oil stocks are weak after crude oil prices declined overnight. Oil Search is down 0.4 percent, Woodside Petroleum is lower by almost 1 percent and Santos is losing more than 1 percent.

Gold miners are mixed after gold prices slipped to a one-week low overnight. Newcrest Mining is higher by more than 1 percent, while Evolution Mining is lower by 0.2 percent.

Blackmores said its profit for the first nine months of the year declined 14 percent amid softening demand from China. The vitamin maker’s shares are losing more than 4 percent.

On the economic front, the Reserve Bank of Australia will release the minutes from its April 2 monetary policy meeting. At the meeting, the RBA voted to maintain the cash rate at 1.50 percent – where it has remained since August 2016.

In the currency market, the Australian dollar is higher against the U.S dollar on Tuesday. The local currency was quoted at $0.7175, down from $0.7169 on Monday.

The Japanese market is modestly higher with investors cautious following the negative from Wall Street and on news that the U.S. and Japan have started high-level trade talks in Washington.

The benchmark Nikkei 225 Index is adding 56.37 points or 0.25 percent to 22,225.48, after touching a low of 22,095.32 in early trades. Japanese shares touched a four-month high on Monday.

The major exporters are higher on a slightly weaker yen. Sony is advancing almost 2 percent, Canon is rising almost 1 percent, Mitsubishi Electric is higher by 0.4 percent and Panasonic is adding 0.2 percent.

In the tech sector, Advantest is declining 0.2 percent, while Tokyo Electron is up 0.3 percent. Among the major automakers, Honda is unchanged, while Toyota is edging down 0.1 percent.

In the banking space, Mitsubishi UFJ Financial is declining more than 1 percent and Sumitomo Mitsui Financial is down 0.4 percent. In the oil sector, Inpex is losing more than 1 percent and Japan Petroleum is down 0.2 percent after crude oil prices declined overnight.

Among the other major gainers, Chiyoda Corp. is rising almost 8 percent, KDDI Corp. is gaining almost 6 percent and NTT Docomo is higher by almost 4 percent.

In response to the Japanese government urging telecom carries to lower service fees, mobile carrier NTT Docomo said Monday it will cut its mobile phone fees by up to 40 percent from June 2019.

On the flip side, Toho Co. is lower by almost 3 percent, while Sumitomo Dainippon Pharma, Credit Saison and Hino Motors are all losing more than 2 percent each.

In economic news, Japan will see February numbers for its tertiary industry index and March figures for condominium sales today.

In the currency market, the U.S. dollar is trading in the upper 111 yen-range on Tuesday.

Elsewhere in Asia, Shanghai, New Zealand, Singapore, Hong Kong, Indonesia, Malaysia and Taiwan are all modestly higher, while South Korea is edging lower.

On Wall Street, stocks closed modestly lower on Monday after financial giant Goldman Sachs reported better than expected first-quarter earnings, while revenues missed expectations. Shares of Citigroup also closed just below the unchanged line even though the company reported first-quarter earnings that exceeded analyst estimates. Nonetheless, traders seemed reluctant to make more significant moves ahead of the release of quarterly results from a slew of other big-name companies in the coming days.

The Dow slipped 26.53 points or 0.1 percent to 26,384.77, the Nasdaq dipped 8.15 points or 0.1 percent to 7,976.01 and the S&P 500 edged down 1.83 points or 0.1 percent to 2,905.58.

European stocks saw modest strength on Monday, although the U.K.’s FTSE 100 Index closed just below the unchanged line. The German DAX Index and the French CAC 40 Index edged up by 0.2 percent and 0.1 percent, respectively.

Crude oil futures declined on Monday on reports Russia and OPEC might increase production to boost their market share. WTI crude futures for May ended down $0.49 or 0.8 percent at $63.40 a barrel on the New York Mercantile Exchange.

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