Asian Markets Trade Mostly Lower

Asian stock markets are trading mostly lower on Monday, following the broadly negative cues from Wall Street on Friday, amid lingering concerns about persistent inflation and the further prospect of aggressive monetary policy tightening by central banks around the world. Asian markets closed mostly lower on Friday.

With the closely watched US Labor Department report showing continued strength in the labor market, economists predicted the Federal Reserve will now continue with its plans to raise interest rates sharply over the coming months.

The Australian stock market is significantly lower on Monday, extending the losses in the previous session, with the benchmark S&P/ASX 200 staying above the 7,100 level, following the broadly negative cues from Wall Street on Friday, with weakness across all sectors amid concerns of further monetary policy tightening after the RBA said it will need to raise interest rates further as inflation could exceed its expectations this year.

The benchmark S&P/ASX 200 Index is losing 92.70 points or 1.29 percent to 7,112.90, after hitting a low of 7,092.30 earlier. The broader All Ordinaries Index is down 115.30 points or 1.54 percent to 7,352.30. Australian stocks closed sharply lower on Friday.

Among the major miners, BHP Group is losing almost 1 percent, Rio Tinto is down more than 1 percent, OZ Minerals is declining almost 3 percent, Mineral Resources is slipping more than 3 percent and Fortescue Metals is sliding more than 2 percent.

Oil stocks are higher, Woodside Petroleum and Santos are gaining almost 1 percent each, while Origin Energy is edging up 0.1 percent and Beach energy is edging up 0.3 percent.

Among tech stocks, Xero is losing almost 3 percent and WiseTech Global is declining more than 3 percent, while Appen is slipping almost 2 percent, Afterpay owner Block is sliding more than 6 percent and Zip is down more than 3 percent.

Gold miners are weak. Gold Road Resources and Evolution Mining are losing more than 2 percent each, while Resolute Mining and Northern Star Resources are down 1.5 percent each. Newcrest Mining is edging down 0.3 percent.

Among the big four banks, Commonwealth Bank is flat, ANZ Banking is edging down 0.5 percent and National Australia Bank is down more than 1 percent. Westpac is gaining more than 2 percent after reporting half-year earnings that came in ahead of market expectations. It also lifted its dividend.

In the currency market, the Aussie dollar is trading at $0.702 on Monday.

The Japanese stock market is sharply lower on Monday, giving up some of the gains in the previous session, with the Nikkei 225 staying above the 26,400 level, following the broadly negative cues from Wall Street on Friday, as traders brace for further global monetary policy tightening to tame persistent inflation.

The benchmark Nikkei 225 Index closed the morning session at 26,410.30, down 593.26 points or 2.20 percent, after hitting a low of 26,343.29 earlier. Japanese shares ended modestly higher on Friday.

Market heavyweight SoftBank Group is losing almost 3 percent and Uniqlo operator Fast Retailing is slipping more than 5 percent. Among automakers, Honda is losing more than 1 percent, while Toyota is down almost 1 percent.

In the tech space, Advantest is declining almost 1 percent, while Tokyo Electron and Screen Holdings are losing more than 2 percent each. In the banking sector, Sumitomo Mitsui Financial is losing almost 1 percent and Mitsubishi UFJ Financial is down more than 1 percent, while Mizuho Financial is gaining almost 1 percent.

The major exporters are weak, with Sony losing almost 2 percent, Mitsubishi Electric slipping almost 1 percent and Panasonic edging down 0.2 percent. Canon is flat.

Among the other major losers, JFE Holdings is plunging more than 9 percent, while Konami Holdings, Toho Zinc, Nippon Steel and Pacific Metals are slipping more than 6 percent each. Marubeni and Kobe Steel are losing almost 5 percent each, while Sumitomo Metal Mining, Tokai Carbon, Komatsu and Showa Denko K.K. are sliding more than 4 percent each. Keio, Yaskawa Electric and Dowa Holdings are declining almost 4 percent each.

Conversely, there are no major gainers.

In economic news, the services sector in Japan swung into expansion territory in April, the latest survey from Jibun Bank revealed on Monday with a services PMI score of 50.7. That’s up from 49.4 in March and it moves above the boom-or-bust line of 50 that separates expansion from contraction. The survey also showed that the composite index improved to 51.1 in April from 50.3 in March.

Members of the Bank of Japan’s Monetary Policy Board said that the country’s economy continues to show improvement, minutes from the central bank’s meeting on March 17 and 18 revealed on Monday. The persistence of COVID-19 and the Russian invasion of Ukraine provide significant uncertainties moving forward for the global economy, the minutes said, and are limiting the upside in Japan. The bank also noted that inflation is expected to continue to rise in the coming months, pushed higher by the recent spike in energy prices.

At the meeting, the bank voted to maintain its monetary policy stimulus, holding the interest rate at -0.1 percent on current accounts that financial institutions maintain at the central bank. The bank will also continue to purchase a necessary amount of Japanese government bonds without setting an upper limit so that 10-year JGB yields will remain at around zero percent.

In the currency market, the U.S. dollar is trading in the higher 130 yen-range on Monday.

Elsewhere in Asia, Indonesia and South Korea are losing 2.6 and 2.1 percent, respectively. Taiwan and New Zealand are down 1.7 and 1.5 percent, respectively. Malaysia and Singapore are declining 0.4 and 0.2 percent, respectively. China is bucking the trend and is up 0.5 percent. Hong Kong is closed for National Day holiday.

On Wall Street, stocks fluctuated wildly over the course of the trading day on Friday before eventually ending the session mostly lower. With the drop on the day, the major averages extended the sell-off seen during trading on Thursday.

The tech-heavy Nasdaq tumbled 173.03 points or 1.4 percent to 12,144.66, once again hitting its lowest closing level in well over a year. The S&P 500 slid 23.53 points or 0.6 percent to a nearly one-year closing low of 4,123.34 and the Dow fell 98.60 points or 0.3 percent to a two-month closing low of 32,899.37.

The major European markets also moved to the downside on the day. While the French CAC 40 Index tumbled 1.7 percent, the German DAX Index and the U.K.’s FTSE 100 Index slumped by 1.6 percent and 1.5 percent, respectively.

Crude oil prices closed higher on Friday, and posted a weekly gain as well, amid worries about supply following the European Union’s decision proposing some of its toughest measures yet against Russia. West Texas Intermediate Crude oil futures for June ended higher by $1.51 or 1.4 percent at $109.77 a barrel. WTI crude futures gained nearly 5 percent in the week.

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