Asian Markets Mostly Lower

Asian stock markets are mostly lower on Wednesday despite the positive cues overnight from Wall Street. Investors remained cautious as they awaited the results of two key Senate runoffs in Georgia.

The elections will determine how much U.S. President-elect Joe Biden can push through Democrats’ agenda, including rewriting the tax code as well as boosting stimulus and infrastructure spending.

The Australian market is declining despite the positive cues from Wall Street and higher commodity prices. Gains by oil stocks and the major miners were offset by weakness in the banking sector.

The benchmark S&P/ASX 200 Index is losing 14.30 points or 0.21 percent to 6,667.60, after falling to a low of 6,640.60. The broader All Ordinaries Index is down 12.40 points or 0.18 percent to 6,943.30. Australian shares ended on a flat note on Tuesday.

In the banking sector, National Australia Bank, Westpac, ANZ Banking and Commonwealth Bank are down in a range of 0.1 percent to 0.4 percent.

Gold miners are also weak even as gold prices extended gains overnight. Newcrest Mining and Evolution Mining are declining more than 1 percent each.

Meanwhile, oil stocks are notably higher after crude oil prices jumped overnight as Saudi Arabia said it will cut crude production by 1 million barrel per day from February through March. Oil Search is gaining almost 6 percent, Santos is rising more than 4 percent and Woodside Petroleum is higher by more than 3 percent.

Among the major miners, Fortescue Metals is rising more than 2 percent and BHP Group is advancing almost 1 percent, while Rio Tinto is down 0.4 percent.

Biotech giant CSL is losing almost 2 percent.

In economic news, the latest survey from Markit Economics revealed that the services sector in Australia continued to expand in December, and at a faster pace, with a five-month high services PMI score of 57.0. That’s up from 55.1 in November and it moves further above the boom-or-bust line of 50 that separates expansion from contraction.

The survey also showed that the composite index improved to 55.6 in December from 54.9 in November.

The Japanese market is extending losses to a third straight day in choppy trade, while the yen strengthened against the U.S. dollar amid worries about the economic impact from the month-long state of emergency planned by the Japanese government to contain the coronavirus surge in the country.

The benchmark Nikkei 225 Index is down 83.99 points or 0.31 percent to 27,074.64, after touching a low of 27,064.08. Japanese stocks closed modestly lower on Tuesday.

Market heavyweight SoftBank Group is rising more than 2 percent, while Fast Retailing is declining more than 1 percent. In the tech space, Advantest is lower by almost 2 percent and Tokyo Electron is declining more than 1 percent.

The major exporters are mixed on a stronger yen. Sony is declining almost 1 percent and Mitsubishi Electric is down 0.6 percent, while Canon is rising almost 1 percent and Panasonic is edging up 0.1 percent.

Among automakers, Honda is advancing almost 1 percent and Toyota is adding 0.2 percent. In the banking sector, Sumitomo Mitsui Financial is higher by more than 1 percent and Mitsubishi UFJ Financial is adding almost 1 percent.

Among the other major gainers, Nikon Corp. is gaining almost 6 percent, while Z Holdings, Kawasaki Kisen Kaisha and Inpex are rising almost 5 percent each. Mitsui Mining & Smelting is higher by almost 4 percent.

Conversely, Nissan Chemical is lower by more than 2 percent.

On the economic front, the latest survey from Jibun Bank revealed that the services sector in Japan continued to contract in December, and at a faster rate, with a services PMI score of 47.7. That’s down slightly from 47.8 in November and it moves further beneath the boom-or-bust line of 50 that separates expansion from contraction.

The survey also showed that its composite index improved to 48.5 in December from 48.1 in November.

In the currency market, the U.S. dollar is trading in the upper 102 yen-range on Wednesday.

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

On Wall Street, stocks closed higher on Tuesday, with energy stocks helping to lead the rebound as they benefited from a substantial increase by the price of crude oil. Traders generally remain optimistic about an economic recovery despite the recent spike in coronavirus cases. Adding to the positive sentiment, a report released by the Institute for Supply Management showed an unexpected acceleration in the pace of growth in manufacturing activity in the month of December.

The Dow rose 167.71 points or 0.6 percent to 30,391.60, the Nasdaq jumped 120.51 points or 1 percent to 12,818.96 and the S&P 500 climbed 26.21 points or 0.7 percent to 3,726.86.

The major European markets finished mixed on Tuesday. While the U.K.’s FTSE 100 Index rose by 0.6 percent, the French CAC 40 Index dropped by 0.4 percent and the German DAX Index slid by 0.6 percent.

Crude oil futures ended sharply higher on Tuesday, lifted by an announcement from Saudi Arabia that it will cut crude production by 1 million barrel per day from February through March. WTI crude for February ended up by $2.31 or about 4.9 percent at $49.93 a barrel.

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