Asian Markets Trade Mostly Higher

Asian stock markets are trading mostly higher on Wednesday, following the broadly positive cues overnight from Wall Street, on a sharp overnight rally in commodity prices and as traders reacted positively to US Federal Reserve Chairman Jerome Powell’s testimony before a Senate Banking Committee hearing on his renomination for another term. Asian Markets closed mostly lower on Tuesday.

Powell highlighted elevated inflation as a result of supply chain issues and said the Fed would use all of its tools to prevent higher inflation from becoming entrenched. He said the central bank has not decided as yet on reducing its balance sheet and that it might take 2 to 4 meetings for the policymakers to decide on the approaches.

Powell also said that he expects the economic impact of the new coronavirus Omicron variant to be short-lived and that upcoming quarters may be positive for the economy.

Traders also looked ahead to the US inflation data due later in the day. Expectations are that inflation may have risen by an annual 5.4% in December from 4.9% in the prior month.

The Australian stock market is significantly higher on Wednesday, recouping the losses in the previous session, with the benchmark S&P/ASX 200 staying below the 7,500 level, following the broadly positive cues overnight from Wall Street, with strong gains across most sectors amid higher a sharp overnight rally in commodity prices and as traders digest Fed Chair Powell’s comments . Technology stocks also extended their gains.

However, the upside is limited as the country’s Covid-19 infections hovered near record levels.

Domestically, New South Wales reported 34,759 new cases and 21 deaths on Tuesday and Victoria also reported 40,127 new cases and 21 deaths. Queensland recorded 22,069 new cases and Tasmania reported 1,583 new cases.

The benchmark S&P/ASX 200 Index is gaining 52.60 points or 0.71 percent to 7,442.70, after touching a high of 7,467.50 earlier. The broader All Ordinaries Index is up 55.80 points or 0.72 percent to 7,766.50. Australian stocks ended notably lower on Tuesday.

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

Oil stocks are higher. Woodside Petroleum is gaining more than 3 percent and Santos is advancing more than 2 percent, while Beach energy and Origin Energy are adding almost 2 percent each.

In the tech space, WiseTech Global is gaining almost 2 percent, Zip is adding almost 4 percent, Afterpay is advancing more than 5 percent, Appen is rising 4.5 percent and Xero is up 2.5 percent.

Afterpay shares jumped after receiving approval from the Bank of Spain for its $29 billion buyout by payments firm Block Inc., making the deal fully unconditional.

Among the big four banks, ANZ Banking, Westpac and National Australia Bank are flat, while Commonwealth Bank is edging down 0.1 percent.

Among gold miners, Newcrest Mining and Northern Star Resources are adding almost 4 percent each, while Evolution Mining is advancing more than 4 percent, Resolute Mining is up 0.6 percent, Newcrest Mining is losing more than 1 percent and Gold Road Resources is gaining more than 2 percent.

In the currency market, the Aussie dollar is trading at $0.721 on Wednesday.

The Japanese stock market is sharply higher on Wednesday, snapping the three-session losing streak, with the benchmark Nikkei index staying above the 28,700 level, following the broadly positive cues overnight from Wall Street, with gains across most sectors as traders digested Fed Chair Powell’s comments, even as lingering concerns about the impact of the rapid spread of the coronavirus Omicron variant remain.

The benchmark Nikkei 225 Index closed the morning session at 28,748.21, up 525.73 points or 1.86 percent, after touching a high of 28,722.33 earlier. Japanese stocks closed notably lower on Tuesday.

Market heavyweight SoftBank Group is gaining more than 4 percent and Uniqlo operator Fast Retailing is adding more than 1 percent. Among automakers, Honda is edging up 0.4 percent and Toyota is flat.

In the tech space, Screen Holdings is gaining more than 3 percent, while Advantest is adding almost 3 percent and Tokyo Electron is up 3.5 percent.

In the banking sector, Sumitomo Mitsui Financial and Mizuho Financial are losing almost 1 percent each, while Mitsubishi UFJ Financial is edging down 0.3 percent.

Among the major exporters, Panasonic is gaining 1.5 percent, Sony is adding almost 2 percent and Mitsubishi Electric is up more than 2 percent, while Canon is losing more than 1 percent.

Among the other major losers, Sumco is surging more than 6 percent and Inpex is gaining more than 5 percent, while Kawasaki Kisen Kaisha and Keyence are adding almost 5 percent each. Toyota Tsusho and Denso are gaining almost 5 percent each, while Yokogawa Electric, Suzuki Motor, Shin-Etsu Chemical, Fujikura and Showa Denko K.K. are up 3.5 percent each.

Conversely, Eisai is losing almost 3 percent.

In economic news, the value of overall bank lending in Japan was up 0.6 percent on year for the second straight month in December, the Bank of Japan said on Wednesday – coming in at 580.869 trillion yen. Excluding trusts, bank lending climbed an annual 0.5 percent to 504.509 trillion yen, while lending from trusts rose 0.8 percent on year to 76.360 trillion yen. Lending from foreign banks sank 4.4 percent on year to 3.107 trillion yen. For the fourth quarter of 2021, overall bank lending gained 0.7 percent on year, while lending excluding trusts rose 0.6 percent and lending from trusts improved 1.0 percent.

Japan posted a current account surplus of 897.3 billion yen in November, the Ministry of Finance said on Wednesday – down 48.2 percent on year. That still beat forecasts for a surplus of 585 billion yen following the upwardly revised 1.180 trillion yen surplus in October (originally 1.018 trillion yen). Exports were up 23.2 percent on year to 7.445 trillion yen, while imports jumped an annual 44.9 percent to 7.877 trillion yen for a trade deficit of 431.3 billion yen. The capital account saw a deficit of 20.7 billion yen in November, while the financial account had a surplus of 218.5 billion yen.

In the currency market, the U.S. dollar is trading in the lower 115 yen-range on Wednesday.

Elsewhere in Asia, Hong Kong is surging 1.7 percent and South Korea is gaining 1.2 percent, while China, Singapore, Taiwan and Indonesia are gaining between 0.1 and 0.2 percent each. New Zealand and Malaysia are down 0.3 and 0.1 percent, respectively.

On Wall Street, stocks showed a significant turnaround over the course of the trading day on Tuesday after moving to the downside early in the session. The major averages extended the recovery seen in the previous session, with the tech-heavy Nasdaq posting a particularly strong gain.

The major averages moved roughly sideways going into the close, hovering in positive territory. While the Nasdaq surged 210.62 points or 1.4 percent at 15,153.45, the S&P 500 advanced 42.78 points or 0.9 percent to 4,713.07 and the Dow rose 183.15 points or 0.5 percent at 36,252.02.

The major European markets also showed a notable rebound following recent weakness. While the U.K.’s FTSE 100 Index rose by 0.6 percent, the French CAC 40 Index and the German DAX Index jumped by 1 percent and 1.1 percent, respectively.

Crude oil prices moved sharply higher Tuesday, lifting the most active crude futures contract to the highest settlement in about two months. Hopes that the spread of the Omicron variant will not derail the global economy and adversely impact energy demand supported oil prices. West Texas Intermediate crude oil futures for February spiked $2.99 or 3.8 percent at $81.22 a barrel.

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