Asian Markets Track Wall Street Lower

Asian stock markets are trading mostly lower on Monday, following the broadly negative cues from Wall Street on Friday, as the unexpected drop in US unemployment rate, the lowest since May 1969, led to renewed concerns the US Fed will keep interest rates at higher than currently expected levels for many more months. Asian markets closed mixed on Friday.

Traders also turned cautious after the US military shot down a suspected Chinese spy balloon over the Atlantic Ocean, raising geopolitical tensions.

The Australian stock market is modestly lower in choppy trading on Monday after opening in the green, giving up the gains in the previous three sessions, with the benchmark S&P/ASX 200 staying above the 7,500 level, following the broadly negative cues from Wall Street on Friday, with weakness in gold miners, financials and technology stocks, partially offset by gains in iron ore miners and energy stocks.

The benchmark S&P/ASX 200 Index is losing 16.10 points or 0.21 percent to 7,542.00, after hitting a low of 7,531.40 and a high of 7,567.70 earlier. The broader All Ordinaries Index is down 20.80 points or 0.27 percent to 7,751.00. Australian stocks closed notably higher on Friday.

Among the major miners, Rio Tinto, Fortescue Metals and BHP Group are gaining more than 1 percent each, while Mineral Resources is edging down 0.4 percent. OZ Minerals is flat.

Oil stocks are mostly higher. Woodside Energy and Origin Energy are gaining almost 1 percent each, while Beach energy is advancing more than 3 percent and Santos is edging 0.5 percent.

Among tech stocks, Afterpay owner Block is edging down 0.4 percent, Appen is losing more than 3 percent, Xero is down more than 1 percent, WiseTech Global is slipping almost 1 percent and Zip is declining almost 3 percent.

Gold miners are mostly weak. Northern Star Resources is edging down 0.6 percent, Evolution Mining is down more than 1 percent, Gold Road Resources is losing almost 1 percent and Resolute Mining is declining almost 2 percent, while Newcrest Mining is soaring more than 11 percent after it received a A$24.45 billion takeover bid from American company Newmont Corp.

Among the big four banks, Commonwealth Bank, National Australia Bank, ANZ Banking and Westpac are all losing almost 1 percent each.

In other news, shares in Nick Scali are plunging more than 10 percent despite reporting a 70 percent jump in profit for the first half.

In economic news, the value of retail sales in Australia was down a seasonally adjusted 3.9 percent on month in December, the Australian Bureau of Statistics said on Monday – coming in at A$34.472 billion. On a yearly basis, retail sales were up 7.5 percent. For the fourth quarter of 2022, retail sales dipped 0.2 percent to A$96.877 billion. Sales were up 1.8 percent on year in Q4.

In the currency market, the Aussie dollar is trading at $0.692 on Monday.

The Japanese stock market is significantly higher on Monday, extending the gains in the previous three sessions, with the Nikkei 225 moving a tad above the 27,800 level, despite the broadly negative cues from Wall Street on Friday, as the sharp weakening of the yen against the US dollar is expected to make Japanese assets more attractive for foreign investors. Major exporters are also gaining.

The benchmark Nikkei 225 Index is up 292.51 or 1.06 percent at 27,801.97, after touching a high of 27,821.22 earlier. Japanese shares ended modestly higher on Friday.

Market heavyweight SoftBank Group is edging up 0.1 percent and Uniqlo operator Fast Retailing is gaining almost 3 percent. Among automakers, Honda is gaining more than 2 percent and Toyota is adding almost 2 percent.

In the tech space, Screen Holdings is edging up 0.2 percent, while Advantest and Tokyo Electron are losing almost 1 percent each. In the banking sector, Sumitomo Mitsui Financial is losing almost 1 percent, Mizuho Financial is declining more than 2 percent and Mitsubishi UFJ Financial is down almost 3 percent.

The major exporters are mostly higher. Panasonic is gaining almost 1 percent, while Canon and Mitsubishi Electric are adding more than 1 percent each. Sony is losing almost 1 percent.

Among the other major gainers, Mitsubishi Corp. is soaring almost 8 percent, NTN is surging more than 6 percent and Mitsubishi Motors is gaining almost 5 percent, while Sumitomo Realty & Development and Kawasaki Kisen Kaisha are adding more than 4 percent each. Mazda Motor, Yamaha, Marubeni, Sumitomo and Denso are advancing almost 4 percent each, while Nissan Motor, Mitsui Chemicals, Nippon Sheet Glass, Hino Motors and Toyota Tsusho are all up more than 3 percent each.

Conversely, T&D Holdings is losing almost 3 percent.

In the currency market, the U.S. dollar is trading in the lower 132 yen-range on Monday.

Elsewhere in Asia, Hong Kong is down 2.0 percent, while China, South Korea, Taiwan and Indonesia are lower by between 0.2 and 0.9 percent each. Singapore is bucking the trend and is up 0.2 percent. New Zealand is closed for Waitangi Day holiday and Malaysia is closed for Thaipusam holiday.

On Wall Street, stocks recovered from initial weakness but showed a significant move back to the downside over the course of the trading session on Friday. With the pullback on the day, the Nasdaq and S&P 500 gave back ground after moving sharply higher for three straight sessions.

The Nasdaq tumbled 193.86 points or 1.6 percent to 12,006.95, the S&P 500 also slumped 43.28 points or 1.0 percent to 4,136.48 and the narrower Dow showed a more modest decrease on the day, with the blue chip index falling 127.93 points or 0.4 percent to 33,926.01.

Meanwhile, the major European markets also finished the day mixed. While the German DAX Index dipped by 0.2 percent, the French CAC 40 Index advanced by 0.9 percent and the U.K.’s FTSE 100 Index jumped by 1.0 percent.

Crude oil prices fell sharply Friday amid concerns about the outlook for fuel demand, with investors weighing the prospects of a recession – while a stronger dollar also weighed. West Texas Intermediate Crude oil futures for March ended lower by $2.49 or 3.3 percent at $73.39 a barrel.

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