Asian Markets Mixed Amid Cautious Trades

Asian stock markets are trading mixed on Wednesday, following the broadly positive cues from global markets overnight, as traders remain cautious and apprehensive over the outlook for interest rates as they continue to look ahead to next week’s US Federal Reserve monetary policy meeting. Asian markets closed mixed on Tuesday.

The Fed is widely expected to pause its recent series of interest rate hikes. There are hopes for a pause in Fed hikes at both the June and July policy meetings.

CME Group’s FedWatch Tool is currently indicating a 79.4 percent chance the Fed will leave rates unchanged next week but a 52.7 percent chance of another quarter point increase in July.

Key US inflation reports are also likely to be in the spotlight next week, as the data could impact whether the Fed resumes its rate hikes next month.

The Australian stock market is slightly higher on Wednesday, recouping some of the losses in the previous session, with the benchmark S&P/ASX 200 staying above the 7,100 level, following the broadly positive cues from global markets overnight, with gains in miners and technology stocks, partially offset by weakness in energy stocks amid tumbling crude oil prices.

The benchmark S&P/ASX 200 Index is gaining 4.00 points or 0.06 percent to 7,133.60, after touching a high of 7,164.20 earlier. The broader All Ordinaries Index is up 3.30 points or 0.05 percent to 7,323.20. Australian stocks ended sharply lower on Tuesday.

Among major miners, Fortescue Metals and Rio Tinto are gaining almost 1 percent each, while BHP Group is adding more than 1 percent and Mineral Resources is advancing almost 2 percent.

Oil stocks are lower. Beach energy is declining almost 7 percent, while Woodside Energy and Santos are losing almost 1 percent each. Origin Energy is flat.

In the tech space, Afterpay owner Block is surging more than 5 percent and Appen is adding more than 3 percent, while WiseTech Global and Xero are gaining almost 2 percent each. Zip is flat.

Among the big four banks, Westpac and National Australia Bank are edging down 0.2 percent each, while ANZ Banking is edging up 0.1 percent and Commonwealth Bank is losing almost 1 percent.

Among gold miners, Gold Road Resources is edging up 0.5 percent, Evolution Mining is gaining more than 1 percent and Resolute Mining is up more than 1 percent, while Northern Star Resources and Newcrest Mining adding almost 1 percent each.

In other news, shares in Polynovo are soaring more than 12 percent after the medical devices firm posted record monthly sales of $7.2 million in May, including $5.2 million in the U.S.

In economic news, Australia’s gross domestic product expanded by a seasonally adjusted 0.2 percent on quarter in the first quarter of 2023, the Australian Bureau of Statistics said on Wednesday. That missed expectations for an increase of 0.8 percent and was down from 0.5 percent in the previous three months.

On an annualized basis, GDP was up 2.3 percent – again missing forecasts for a gain of 2,7 percent, which would have been steady from the three months prior. The GDP chain price index was up 1.8 percent on quarter, while final consumption rose 0.2 percent.

In the currency market, the Aussie dollar is trading at $0.667 on Wednesday.

The Japanese stock market is sharply lower on Wednesday after opening in the green, snapping a four-session winning streak, with the Nikkei 225 falling below the 32,100 level and off the recent 33-year highs, despite the broadly positive cues from global markets overnight, with traders continuing to booking profits after the recent rally in the markets.

The benchmark Nikkei 225 Index closed the morning session at 32,039.34, down 467.44 points or 1.44 percent, after hitting a low of 31,992.58 earlier. Japanese stocks ended significantly higher on Tuesday.

Market heavyweight SoftBank Group is losing almost 2 percent and Uniqlo operator Fast Retailing is declining almost 1 percent. Among automakers, Honda is losing almost 1 percent and Toyota is also down almost 1 percent.

In the tech space, Screen Holdings is losing almost 3 percent, while Advantest and Tokyo Electron are declining more than 3 percent each.

In the banking sector, Sumitomo Mitsui Financial and Mizuho Financial are edging down 0.1 to 0.2 percent each, while Mitsubishi UFJ Financial is losing almost 1 percent.

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

Among other major losers, Renesas Electronics is losing almost 5 percent and Kobe Steel is declining more than 3 percent, while Shionogi & Co., Toray Industries, Rakuten Group and Daikin Industries are down almost 3 percent each.

Conversely, Tokuyama is surging more than 5 percent, while Sharp and Kawasaki Heavy Industries are gaining almost 3 percent each.

In the currency market, the U.S. dollar is trading in the lower 139 yen-range on Wednesday.

Elsewhere in Asia, Hong Kong is up 1.2 percent, while China, South Korea and Taiwan are higher by between 0.3 and 0.5 percent each. New Zealand, Singapore, Malaysia and Indonesia lower by between 0.1 and 0.9 percent each.

On Wall Street, stocks showed a lack of direction over the course of the trading day on Tuesday, extending the lackluster performance seen in the previous session. The major averages once again spent the day bouncing back and forth across the unchanged line.

The major averages eventually ended the day in positive territory. The Nasdaq climbed 46.99 points or 0.4 percent to 13,276.42, the S&P 500 rose 10.06 points or 0.2 percent to 4,283.85 and the Dow inched up 10.42 points or less than a tenth of a percent to 33,573.28.

The major European markets also moved modestly higher on the day. While the U.K.’s FTSE 100 Index rose by 0.4 percent, the German DAX Index edged up by 0.2 percent and the French CAC 40 Index inched up by 0.1 percent.

Crude oil prices slumped Tuesday on concerns about the outlook for energy demand due to economic slowdown and interest rate hikes. West Texas Intermediate Crude oil futures for July fell $0.41 or 0.6 percent at $71.74 a barrel.

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