Asian Markets Track Wall Street Lower

Asian stock markets are trading mostly lower on Thursday, following the broadly negative cues from Wall Street overnight, as traders remained cautious after the US Fed indicated it will continue to hold interest rates higher for longer to contain inflation. The prospects of a possible downgrade of several U.S. lenders by Fitch Ratings and lingering concerns about China’s economic slowdown also continued to weigh on sentiment. Asian Markets closed mostly lower on Wednesday.

The minutes from the Fed’s July meeting said “most of the central bank officials continued to see significant upside risks to inflation, which could require further tightening of monetary policy.”

The Australian stock market is significantly lower on Thursday, extending the steep losses in the previous session, with the benchmark S&P/ASX 200 falling to nearly the 7,100 level, following the broadly negative cues from Wall Street overnight, with weakness across sectors, led by miners and technology stocks.

The benchmark S&P/ASX 200 Index is losing 65.00 points or 0.90 percent to 7,130.20, after hitting a low of 7,106.80 earlier. The broader All Ordinaries Index is down 65.30 points or 0.88 percent to 7,346.50. Australian stocks ended sharply lower on Wednesday.

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

Oil stocks are mostly lower. Santos and Woodside Energy are losing almost 1 percent each, while Beach energy is declining almost 2 percent. Origin Energy is gaining almost 2 percent.

In the tech space, Afterpay owner Block is losing more than 1 percent, WiseTech Global is down almost 1 percent, Xero is declining almost 2 percent, Appen is slipping almost 3 percent and Zip is plunging almost 5 percent.

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

Among gold miners, Evolution Mining is declining more than 4 percent, Newcrest Mining is losing almost 1 percent, Gold Road Resources is slipping almost 3 percent, Northern Star Resources down more than 2 percent and Resolute Mining is sliding almost 4 percent.

In other news, shares in IPH are soaring almost 13 percent after it boosted its final dividend for the year.

Shares in Ingham Group are skyrocketing more than 15 percent after it reported a 72 per cent jump in full-year net profit.

Shares in Nuix plunged almost 9 percent despite reporting a 19.8 percent growth in statutory revenue over the past year.

Shares in Sezzle are surging almost 6 percent as it is set be begin trading on the Nasdaq later in the day.

Shares in Core Lithium are sinking almost 23 percent on reports of a $100 million share placement by the battery metals developer.

In economic news, the unemployment rate in Australia came in at a seasonally adjusted 3.7 percent in July, the Australian Bureau of Statistics said on Thursday. That missed forecasts for 3.6 percent and was up from 3.5 percent in June.

The Australian economy lost 14,600 jobs last month versus expectations for an increase of 15,000 following the gain of 32.600 in the previous month. The participation rate was 66.7 percent, also missing forecasts for 66.8 percent, which would have been unchanged.

In the currency market, the Aussie dollar is trading at $0.638 on Thursday.

The Japanese stock market is significantly lower on Thursday, extending the steep losses in the previous session, with the Nikkei 225 falling below the 31,500 level, following the broadly negative cues from Wall Street overnight, with weakness across sectors, led by index heavyweights and exporter stocks, after domestic data showed exports declined for the first time in 29 months, while imports dropped the most in nearly three years.

The benchmark Nikkei 225 Index closed the morning session at 31,478.90, down 287.92 points or 0.91 percent, after hitting a low of 31,309.68 earlier. Japanese stocks closed sharply lower on Wednesday.

Market heavyweight SoftBank Group is losing almost 2 percent and Uniqlo operator Fast Retailing is declining 2.5 percent. Among automakers, Toyota is losing more than 1 percent and Honda is slipping almost 1 percent.

In the tech space, Screen Holdings is edging up 0.1 percent and Advantest is edging up 0.4 percent, while Tokyo Electron is edging down 0.3 percent.

In the banking sector, Mitsubishi UFJ Financial and Sumitomo Mitsui Financial are losing almost 2 percent each, while Mizuho Financial is declining more than 1 percent.

Among the major exporters, Canon is losing more than 1 percent, Mitsubishi Electric is down 1.5 percent, Panasonic is declining more than 2 percent and Sony is declining almost 1 percent.

Among other major losers, CyberAgent is losing almost 5 percent, while Rakuten Group, Dowa Holdings and Nidec are down more than 4 percent each. Hoya, Nippon Paper Industries, Teijin and Kobe Steel are declining almost 4 percent each, while Mitsui & Co., Trend Micro, Marubeni, M3, Mitsui E&S, Mitsubishi Heavy Industries and Sumitomo Osaka Cement are declining more than 3 percent each.

Conversely, there are no other major gainers.

In economic news, the value of core machine orders in Japan was up a seasonally adjusted 2.7 percent on month in June, the Cabinet Office said on Thursday – coming in at 854.0 billion yen. That missed forecasts for an increase of 4.6 percent following the 7.6 percent decline in May.

On a yearly basis, core machine orders shed 5.8 percent – again shy of expectations for a fall of 5.5 percent after sinking 8.7 percent in the previous month. The total value of machinery orders received by 280 manufacturers operating in Japan increased 0.2 percent on month and fell 8.6 percent on year to 2,643.4 billion yen.

For the second quarter of 2023, orders were down 3.2 percent on quarter and 6.7 percent on year at 2,585.5 billion yen. For the third quarter, orders are forecast to fall 2.6 percent on quarter and 7.9 percent on year to 2,517.4 billion yen.

Japan also posted a merchandise trade deficit of 78.731 billion yen in July, the Ministry of Finance said on Thursday. That was well shy of estimates for a surplus of 24.6 billion yen following the upwardly revised 43.1 billion yen surplus in June (originally 43.0 billion).

Exports were down 0.3 percent on year to 8.724 trillion yen, beating forecasts for a drop of 0.8 percent following the 1.5 percent increase in the previous month. Imports slumped an annual 13.5 percent versus expectations for a fall of 14.7 percent after dropping 12.9 percent a month earlier.

In the currency market, the U.S. dollar is trading in the lower 146 yen-range on Thursday.

Elsewhere in Asia, New Zealand is down 1.3 percent, while China, Hong Kong, Singapore, South Korea and Malaysia are lower by between 0.1and 0.6 percent each. Taiwan is bucking the trend and is up 0.1 percent. Indonesia is closed for Independence Day.

On Wall Street, stocks closed lower on Wednesday, extending losses from the previous session, amid indications the Federal Reserve will continue to hold interest rates higher for longer to contain inflation. Prospects of a possible downgrade of several U.S. lenders by Fitch Ratings weighed as well.

The major averages all ended firmly down in negative territory, with the Nasdaq suffering a sharper loss. The Dow ended with a loss of 180.65 points or 0.52 percent at 34,765.74, the S&P 500 shed 33.53 points or 0.76 percent, as it settled at 4,404.33 and the Nasdaq dropped 156.42 points or 1.15 percent to 13,474.63.

Meanwhile, the major European markets ended mixed on Wednesday. The U.K.’s FTSE 100 ended down 0.44 percent, and France’s CAC 40 shed 0.1 percent, while Germany’s DAX crept up 0.14 percent.

Crude oil prices slipped Wednesday amid worries about the outlook for energy demand from China and uncertainty over interest rates. West Texas Intermediate Crude oil futures for September shed $1.61 or 2 percent at $79.38 a barrel.

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