Asian Markets Mostly Lower On Fed Comments

Asian stock markets are trading mostly lower on Thursday, following the broadly negative cues overnight from Wall Street, as traders reacted to rising commodity prices and the US Fed’s minutes that show most officials believe it will be appropriate to begin tapering asset purchases this year.

Traders also remain spooked amid the rapid spread of the delta variant of the coronavirus in the region and in several countries. Asian markets closed mostly higher on Wednesday.

However, the minutes of the July 27 to 28 Fed meeting showed there was still some disagreement over the timing of tapering the asset purchases. While some believe tapering could begin in the “coming months,” others felt a reduction would be more likely to become appropriate next year.

The Australian stock market is notably lower on Thursday, extending the losses of the previous three sessions, with the benchmark S&P/ASX 200 below the 7,500 level, following the broadly negative cues overnight from Wall Street, as traders reacted to Fed minutes and falling commodity prices. Traders also remain spooked amid concerns about the worsening domestic coronavirus situation, particularly in New South Wales.

NSW has reported 681 new local cases of COVID-19 on Wednesday, with more regional areas coming under tougher restrictions. Victoria recorded 57 new locally acquired cases, with active cases now totaling 296 across the state.

The benchmark S&P/ASX 200 Index is losing 30.40 points or 0.41 percent to 7,471.40, after hitting a low of 7,429.20 earlier. The broader All Ordinaries Index is down 28.10 points or 0.36 percent to 7,742.60. Australian markets ended slightly lower on Wednesday.

Among major miners, BHP Group is losing almost 6 percent, Mineral Resources is plunging almost 8 percent and Rio Tinto is down almost 4 percent, while Fortescue Metals is declining more than 4 percent and OZ Minerals is lower by almost 3 percent.

Oil stocks are lower after crude oil prices tumbled overnight. Santos and Origin Energy are losing more than 1 percent each, while Woodside Petroleum is declining more than 2 percent and Beach Energy is edging down 0.5 percent. Oil Search is flat.

Origin Energy posted a $2.29 billion full-year loss as the COVID-19 pandemic and rapid rise of renewable energy hammered prices across the business.

Among the big four banks, Commonwealth Bank, Westpac and ANZ Banking are edging down 0.3 percent each, while National Australia Bank is losing almost 1 percent.

In the tech space, WiseTech Global and Xero are gaining almost 1 percent each, while Afterpay is edging up 0.2 percent and Appen is adding almost 3 percent.

Gold miners are mixed. Evolution Mining is gaining 2.5 percent and Newcrest Mining is adding almost 1 percent, while Resolute Mining is losing more than 3 percent, Northern Star Resources is edging down 0.2 percent and Gold Road Resources is up almost 1 percent.

Newcrest more than doubled its final dividend as part of a $450 million cash bonanza for shareholders after profits rose 17% to $6.3 billion for the full-year.

Casino outfit The Star Entertainment has swung back into the black, reporting a $58 million net profit after tax for the 2021 financial year despite the disruption of COVID-19 shutdowns.

Shares in Star Entertainment are up almost 5 percent after the casino operator swung to profit, reporting a $58 million net profit after tax for the 2021 financial year despite the disruption of COVID-19 shutdowns.

In economic news, the jobless rate in Australia came in at a seasonally adjusted 4.6 percent in July, the Australian Bureau of Statistics said on Thursday – well beneath expectations for 5.0 percent and down from 4.9 percent in June. The Australian economy added 2,200 jobs last month versus expectations for the loss of 46,200 jobs following the addition of 29,100 jobs a month earlier. The participation rate came in at 66.0 percent – in line with expectations and down from 66.2 percent in the previous month.

In the currency market, the Aussie dollar is trading at $0.720 on Thursday.

The Japanese stock market is significantly lower on Thursday, giving up the gains in the previous session, with the benchmark Nikkei 225 falling just below the 27,400 level, following the broadly negative cues overnight from Wall Street, as the unprecedented spread of the delta variant of the coronavirus continues to stifle economic activity in most of the cities in the country.

The benchmark Nikkei 225 Index closed the morning session at 27,394.43, down 191.48 points or 0.69 percent, after hitting a low of 27,357.54 earlier. Japanese shares ended notably higher on Wednesday.

Market heavyweight SoftBank Group is edging up 0.4 percent, while Uniqlo operator Fast Retailing is edging down 0.3 percent. Among automakers, Toyota and Honda are losing almost 1 percent each.

In the tech space, Advantest is losing almost 2 percent, Tokyo Electron is declining more than 2 percent and Screen Holdings is down almost 5 percent.

In the banking sector, Sumitomo Mitsui Financial is edging down 0.4 percent, Mitsubishi UFJ Financial is declining more than 1 percent and Mizuho Financial is losing almost 1 percent.

The major exporters are mostly lower. Sony is losing more than 1 percent, Canon is declining almost 3 percent and Panasonic is down 3.5 percent. Mitsubishi Electric is edging up 0.1 percent.

Among the other major losers, Showa Denko losing almost 6 percent, Tokai Carbon is down more than 5 percent and Citizen Watch is lower by almost 5 percent, while Mitsui & Co., Mitsui E&S Holdings and Nippon Steel are declining more than 4 percent each. JFE Holdings and Toho Zinc are down 3.5 percent each, while Fujikura, Inpex, JFE Holdings, Mitsubishi Materials, Mitsui Mining & Smelting and Ebara are lower by more than 3 percent each.

Conversely, Chugai Pharmaceutical is gaining more than 4 percent, while Shionogi & Co, Z Holdings, Daiichi Sankyo, CyberAgent, NTT Data and Alps Alpine are adding more than 3 percent each. Astellas Pharma is up more than 2 percent.

In the currency market, the U.S. dollar is trading in the lower 110 yen-range on Thursday.

Elsewhere in Asia, Hong Kong and Taiwan are losing 1.5 percent each, while Singapore is down 1 percent. China, South Korea, Malaysia and Indonesia are lower by between 0.3 and 0.9 percent each. New Zealand is bucking the trend and is gaining 1.6 percent.

On Wall Street, stocks saw considerable volatility following the release of the minutes of the latest Federal Reserve meeting on Wednesday before moving sharply lower going into the close. With the late-day sell-off, the major averages extended the notable drop seen in the previous session.

The major averages finished the session just off their worst levels of the day. The Dow plunged 382.59 points or 1.1 percent to 34,960.69, the Nasdaq slumped 130.27 points or 0.9 percent to 14,525.91 and the S&P 500 tumbled 47.81 points or 1.1 percent to 4,400.27.

Meanwhile, the major European markets turned in another mixed performance on the day. While the German DAX Index rose by 0.3 percent, the U.K.’s FTSE 100 Index edged down by 0.2 percent and the French CAC 40 Index slid by 0.7 percent.

Crude oil prices drifted lower Wednesday on concerns about the outlook for energy demand amid the surge in the delta variant of the coronavirus in several countries. West Texas Intermediate Crude oil futures for September ended down $1.13 or 1.7 percent at $65.46 a barrel, the lowest close since May 21.

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