Asian Markets Mostly Lower

Asian stock markets are trading mostly lower on Thursday, despite the broadly positive cues from Wall Street overnight, as traders reacted to data showing China’s manufacturing activity contracted for a fifth straight month in August. Improved optimism over the outlook for interest rates supported the markets. Asian Markets closed mostly higher on Wednesday.

Data showing a slowdown in US private sector job growth and a less than expected growth of the US GDP in the second quarter raised expectations of a pause in interest rate hike by the US Fed.

The CME FedWatch Tool shows that markets are now pricing in an 88.5 percent chance of the Fed pause at its meeting next month and a 52.5 percent chance of another pause at the November meeting.

The Australian stock market is slightly lower on Thursday after opening in the green, giving up some of the gains in the previous three sessions, with the benchmark S&P/ASX 200 staying a tad below the 7,300 level, despite the broadly positive cues from Wall Street overnight, with gains in financial stocks more than offset by losses in mining and technology stocks.

The market pared early gains as traders reacted to the latest Chinese PMI figures that showed August manufacturing activity contracted for a fifth straight month in China, Australia’s largest trading partner.

The benchmark S&P/ASX 200 Index is losing 5.00 points or 0.07 percent to 7,292.70, after touching a high of 7,310.10 earlier. The broader All Ordinaries Index is down 1.40 points or 0.02 percent to 7,505.40. Australian stocks ended sharply higher on Wednesday.

Among major miners, BHP Group and Fortescue Metals are losing almost 1 percent each, while Rio Tinto and Mineral Resources are edging down 0.2 to 0.3 percent each.

Oil stocks are mixed. Santos is edging down 0.1 percent and Woodside Energy is losing almost 4 percent, while Beach energy is edging up 0.3 percent and Origin Energy is gaining almost 1 percent.

In the tech space, Afterpay owner Block and WiseTech Global are edging down 0.2 to 0.5 percent each, while Zip is losing more than 4 percent. Xero is edging up 0.5 percent and Appen is gaining more than 4 percent.

Among the big four banks, Commonwealth Bank is edging up 0.3 percent and National Australia Bank is gaining more than 1 percent, while Westpac and ANZ Banking are adding almost 1 percent each.

Among gold miners, Evolution Mining, Northern Star Resources and Newcrest Mining are edging down 0.3 to 0.5 percent each, while Gold Road Resources is edging up 0.3 percent and Resolute Mining is gaining almost 1 percent.

In the currency market, the Aussie dollar is trading at $0.649 on Thursday.

The Japanese stock market is notably higher on Thursday, extending the gains in the previous three sessions, with the Nikkei 225 moving above the 32,500 level, following the broadly positive cues from Wall Street overnight, boosted by gains in index heavyweights and technology stocks.

Traders were reacting to domestic data showing retail sales grew more than expected, while industrial production declined more than anticipated in July.

The benchmark Nikkei 225 Index closed the morning session at 32,517.23, up 183.77 points or 0.57 percent, after touching a high of 32,534.85 earlier. Japanese stocks closed modestly higher on Wednesday.

Market heavyweight SoftBank Group is edging down 0.2 percent, while Uniqlo operator Fast Retailing is gaining almost 1 percent. Among automakers, Toyota is gaining more than 2 percent and Honda is adding more than 1 percent.

In the tech space, Advantest is gaining almost 2 percent and Tokyo Electron is adding more than 1 percent, while Screen Holdings is flat.

In the banking sector, Mitsubishi UFJ Financial is edging down 0.2 percent and Mizuho Financial is also edging down 0.4 percent, while Sumitomo Mitsui Financial is flat.

Among the major exporters, Canon and Panasonic are edging up 0.2 to 0.4 percent each, while Mitsubishi Electric is edging down 0.4 percent and Sony is declining almost 1 percent.

Among other major gainers, Odakyu Electric Railway is gaining almost 4 percent and Tobu Railway is adding almost 3 percent.

Conversely, Sumitomo Pharma is losing almost 4 percent and Matsui Securities is declining almost 3 percent.

In economic news, the total value of retail sales in Japan was up 6.8 percent on year in July, the Ministry of Economy, Trade and Industry or METI, said on Thursday – coming in at 13.924 trillion yen. That beat forecasts for an increase of 5.4 percent following the downwardly revised 5.6 percent gain in June (originally 5.9 percent). On a monthly basis, retail sales advanced 2.1 percent after slipping 0.6 percent in June.

The METI also said Industrial output in Japan was down a seasonally adjusted 2.0 percent on month in July. That missed forecasts for a fall of 1.4 percent following the 2.4 percent increase in June. On a yearly basis, industrial production was down 2.5 percent following the flat reading in the previous month.

Upon the release of the data, the METI downgraded its assessment of industrial production, saying that it fluctuates indecisively. According to the METI’s forecast of industrial production, output is expected to rise 2.6 percent in August and 2.4 percent in September.

In the currency market, the U.S. dollar is trading in the higher 145 yen-range on Thursday.

Elsewhere in Asia, New Zealand, China, South Korea, Taiwan and Indonesia are lower by between 0.2 and 0.3 percent each, while, Hong Kong and Singapore are up 0.5 and 0.2 percent, respectively. Malaysia is closed for National Day.

On Wall Street, stocks moved moderately higher during trading on Wednesday extending the upward trend seen in recent sessions.

The major averages all moved to the upside, closing higher for the fourth consecutive session. The Nasdaq climbed 75.55 points or 0.5 percent to 14,019.31, the S&P 500 rose 17.24 points or 0.4 percent to 4,514.87 and the Dow inched up 37.57 points or 0.1 percent to 34,890.24.

Meanwhile, the major European markets turned in a mixed performance on the day. While the U.K.’s FTSE 100 Index inched up 0.1 percent, the French CAC 40 Index edged down 0.1 and the German DAX Index dipped 0.2 percent.

Crude oil prices climbed higher Wednesday after data showed a big drop in U.S. crude inventories last week. The dollar’s continued weakness and the impact of Hurricane Idalia on oil fields along Florida’s Gulf Coast also supported prices. West Texas Intermediate Crude oil futures for October rose $0.47 or 0.6 percent at $81.63 a barrel.

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