Asian Markets Trading Mostly Higher

Asian Markets Trading Mostly Higher

November 7, 2022

Asian stock markets are trading mostly higher on Tuesday, despite the broadly negative cues from Wall Street overnight, amid higher global bond yields even as traders are cautious as they await the US Fed’s policy announcement on Wednesday. The Fed is widely expected to raise its benchmark interest rate by another 75 basis points, its fourth straight rate hike, to fight soaring inflation. Asian markets closed mostly higher on Monday.

Traders are likely to keep a close eye on the Fed’s statement, looking for signs the central bank is considering slowing the pace of interest rate hikes. Some analysts expect the Fed will indicate plans to slow the pace of rates hikes beginning in December.

The Fed’s accompanying statement and the post meet speech by Fed Chair Jerome Powell will also be in focus for additional clues on the economic and rate outlook.

The Bank of England, which is scheduled to announce its policy on Thursday, is also likely to raise rates by 75 basis points.

The Australian stock market significantly higher on Tuesday, extending the gains in the previous session, with the benchmark S&P/ASX 200 moving above the 6,900 level, despite the broadly negative cues from Wall Street overnight, led by some gains in technology, materials and energy stocks, even as traders cautiously await the RBA’s rate decision later in the day.

The benchmark S&P/ASX 200 Index is gaining 62.50 points or 0.91 percent to 6,926.00, after touching a high of 6,933.50 earlier. The broader All Ordinaries Index is up 62.80 points or 0.89 percent to 7,117.60. Australian stocks closed sharply higher on Monday.

Among the major miners, Fortescue Metals is gaining more than 2 percent and BHP Group is edging up 0.4 percent, while Rio Tinto and OZ Minerals are adding almost 1 percent each. Mineral Resources is losing almost 2 percent.

Oil stocks are mostly higher. Beach energy is gaining more than 1 percent, Origin Energy is surging more than 4 percent and Woodside Energy is adding almost 1 percent, while Santos is edging down 0.5 percent.

Among tech stocks, Afterpay owner Block is edging up 0.3 percent, WiseTech Global is up almost 1 percent, Zip is surging almost 6 percent and Appen is adding more than 1 percent, while Xero is losing almost 2 percent.

Gold miners are mixed. Gold Road Resources is gaining almost 1 percent and Resolute Mining is advancing 1.5 percent, while Newcrest Mining and Evolution Mining are edging down 0.2 percent each. Northern Star Resources is flat.

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

In economic news, the Reserve Bank of Australia will wrap up its monetary policy meeting on Tuesday and then announce its decision on interest rates. The RBA is expected to hike its benchmark lending rate by 25 basis points, to 2.85 percent from 2.60 percent.

The manufacturing sector in Australia continued to expand in October, albeit at a slower pace, the latest survey from S&P Global revealed on Tuesday with a manufacturing PMI score of 52.7. That’s down from 53.5 in September, although it remains above the boom-or-bust line of 50 that separates expansion from contraction.

In the currency market, the Aussie dollar is trading at $0.644 on Tuesday.

The Japanese stock market is modestly higher in choppy trading on Tuesday, extending the gains in the previous session, with the Nikkei 225 moving above the 27,600 level, despite the broadly negative cues from Wall Street overnight, as traders remained cautious ahead of the US Fed’s rate decision on Wednesday. Some positive domestic earnings news also aided market sentiment.

The benchmark Nikkei 225 Index closed the morning session at 27,646.34, up 58.88 points or 0.21 percent, after touching a high of 27,649.33 and a low of 27,526.18 earlier. Japanese shares ended sharply higher on Monday.

Market heavyweight SoftBank Group is gaining more than 1 percent, while Uniqlo operator Fast Retailing is edging down 0.4 percent. Among automakers, Honda is gaining almost 1 percent and Toyota is edging up 0.2 percent.

In the tech space, Advantest and Tokyo Electron are edging up 0.3 to 0.5 percent each, while Screen Holdings is edging down 0.2 percent. In the banking sector, Mitsubishi UFJ Financial is gaining almost 1 percent and Sumitomo Mitsui Financial is edging up 0.5 percent, while Mizuho Financial edging down 0.3 percent.

The major exporters are mixed, with Sony gaining more than 1 percent and Panasonic surging more than 4 percent, while Canon is edging down 0.1 percent and Mitsubishi Electric is flat.

Among the other major gainers, NTN is soaring almost 9 percent, Japan Tobacco is surging almost 8 percent and Mitsubishi is gaining more than 3 percent, while Komatsu, Marubeni, JGC Holdings, Itochu, Sojitz, Sumitomo and Mitsui & Co. are adding almost 3 percent each.

Conversely, Kyocera is plunging more than 7 percent, Nippon Electric Glass is losing more than 4 percent, Sumitomo Pharma is slipping almost 4 percent and Osaka Gas is declining more than 3 percent, while Otsuka Holdings, Murata Manufacturing and Shionogi & Co. are down almost 3 percent each.

In economic news, the manufacturing sector in Japan continued to expand in October, albeit at a slower pace, the latest survey from Jibun Bank revealed on Tuesday with a manufacturing PMI score of 50.7. That’s down from 50.8 in September, although it remains above the boom-or-bust line of 50 that separates expansion from contraction.

In the currency market, the U.S. dollar is trading in the lower 148 yen-range on Tuesday.

Elsewhere in Asia, Hong Kong is surging 3.7 percent, while China, South Korea, Singapore and Taiwan are higher by between 0.7 and 1.7 percent each. New Zealand, Malaysia and Indonesia are lower by between 0.1 and 0.6 percent each.

On Wall Street, stocks drifted lower on Monday with investors making cautious moves, as they continued to react to recent quarterly earnings updates from big-name companies and looked ahead to the Federal Reserve’s policy announcement due on Wednesday.

The major averages all ended on a negative note. The Dow ended the session with a loss of 128.85 points or 0.39 percent at 32,732.95. The S&P 500 settled with a loss of 29.08 points or 0.75 percent at 3,871.98, while the Nasdaq dropped 114.31 points or 1.03 percent to settle at 10,988.15.

The major European markets ended mixed on the day. The U.K.’s FTSE 100 gained 0.66 percent, Germany’s DAX edged up 0.08 percent, and France’s CAC 40 ended lower by 0.1 percent.

Crude oil prices fell Monday amid concerns about the outlook for energy demand from China following a fresh surge in COVID-19 cases. A rise in oil output in the U.S., and a firm dollar also weighed on prices. West Texas Intermediate Crude oil futures for December ended down $1.37 or 1.6 percent at $86.53 a barrel.

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