Asian Markets Track Wall Street Higher


Asian stock markets are trading mostly higher on Monday, following the broadly positive cues from Wall Street on Friday, as traders remained optimistic the US Fed will slow the pace of interest rate hikes in the coming months. Technology stocks boosted the markets following solid earnings news from some of their peers on Nasdaq. Asian markets closed mostly lower on Friday.

A US Commerce Department report showing core consumer price growth accelerated less than expected in September may encourage the Fed to slow the pace of its interest rate hikes. The Fed’s monetary policy decision is likely to be in the spotlight later in the week and the accompanying statements will likely provide more clues about the pace of tightening in the upcoming months.

Although the Fed is expected to raise interest rates by 75 basis points in November, the possibility of a 50 basis point move at the subsequent meeting has risen

The Australian stock market is significantly higher on Monday, recouping the losses in the previous session, with the benchmark S&P/ASX 200 moving above the 6,800 level, following the broadly positive cues from Wall Street on Friday, with strong gains in technology stocks, which mirrored their peers on Nasdaq amid solid earnings news among technology firms.

Traders are also looking ahead to the Reserve Bank of Australia’s policy decision on Tuesday, where the RBA is expected to maintain plans to deliver smaller rate hikes despite persistent inflationary pressures, with inflation at a three-decade high.

The benchmark S&P/ASX 200 Index is gaining 55.60 points or 0.82 percent to 6,841.30, after touching a high of 6,869.20 earlier. The broader All Ordinaries Index is up 59.60 points or 0.86 percent to 7,033.10. Australian stocks closed significantly lower on Friday.

Among the major miners, Rio Tinto is edging down 0.3 percent, while BHP Group and OZ Minerals are losing almost 1 percent each. Fortescue Metals is gaining almost 1 percent and Mineral Resources is advancing almost 2 percent.

Oil stocks are mostly higher. Beach energy is gaining almost 1 percent and Origin Energy is advancing more than 3 percent, while Woodside Energy and Santos is edging down 0.1 to 0.3 percent each.

Among tech stocks, Afterpay owner Block is gaining almost 4 percent, WiseTech Global is adding more than 3 percent and Xero is advancing more than 4 percent, while Appen is edging down 0.4 percent and Zip is flat.

Gold miners are weak. Gold Road Resources is losing more than 1 percent, Newcrest Mining is declining more than 2 percent, Northern Star Resources is down almost 1 percent and Resolute Mining is slipping almost 4 percent, while Evolution Mining is edging up 0.5 percent.

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

In other news, shares in EML payments are plummeting 26 percent after the payments technology company updated investors on issues regulatory issues in Ireland and the U.K.

In economic news, the value of retail sales in Australia was up a seasonally adjusted 0.6 percent on month in September, the Australian Bureau of Statistics said on Monday – coming in at A$35.096 billion. That was in line with expectations and unchanged from the previous month’s reading. Individually, sales were up for food, clothing, cafes and other, while they were down for household goods and department stores. By territory, sales were up everywhere except South Australia – down 0.2 percent. On a yearly basis, retail sales were up 17.9 percent.

Total private sector credit in Australia was up 0.7 percent on month in September, the Reserve Bank of Australia said on Monday – slowing from 0.8 percent in August. On a yearly basis, credit jumped 9.4 percent – accelerating from 9.3 percent in the previous month.

In the currency market, the Aussie dollar is trading at $0.641 on Monday.

The Japanese stock market is sharply higher on Monday, recouping some of the losses in the previous two sessions, with the Nikkei 225 moving above the 27,500 level, tracking the broadly positive cues from Wall Street on Friday, with gains across most sectors, led by exporters and technology stocks after the Bank of Japan maintained its ultra-low interest rates and dovish stance.

The benchmark Nikkei 225 Index closed the morning session at 27,529.33, up 424.13 or 1.56 percent, after touching a high of 27,577.43 earlier. Japanese shares ended significantly lower on Friday.

Market heavyweight SoftBank Group is gaining more than 5 percent, while Uniqlo operator Fast Retailing is adding more than 1 percent. Among automakers, Honda and Toyota are gaining more than 1 percent each.

In the tech space, Advantest is gaining almost 3 percent and Tokyo Electron is adding more than 2 percent, while Screen Holdings is edging down 0.1 percent. In the banking sector, Sumitomo Mitsui Financial and Mitsubishi UFJ Financial are gaining 1.5 percent each, while Mizuho Financial is adding almost 1 percent.

The major exporters are strong, with Sony and Canon adding almost 2 percent each, while Panasonic is gaining more than 1 percent. Mitsubishi Electric is losing almost 2 percent.

Among the other major gainers, Alps Alpine is skyrocketing 18.5 percent and JTEKT is soaring almost 11 percent, while Toyota Tsusho and Keyence are surging more than 7 percent each. Hitachi is gaining more than 5 percent, NTN is adding almost 5 percent, Mitsui E&S Holdings is up more than 4 percent and Taiyo Yuden is gaining almost 4 percent, while Nippon Sheet Glass, NSK, Japan Steel Works, SMC, Suzuki Motor and Fuji Electric are advancing more than 3 percent each.

Conversely, Pacific Metals is plummeting almost 11 percent, NGK Insulators is plunging more than 7 percent and Toto is losing more than 5 percent.

In economic news, the value of industrial production in Japan was up 9.8 percent on year in September, the Ministry of Economy, Trade and Industry or METI said on Monday. That beat expectations for an increase of 7.0 percent and was up from 5.8 percent in the previous month. On a seasonally adjusted monthly basis, industrial production slipped 1.6 percent – missing forecasts for a decline of 1.0 percent after rising 3.4 percent in August.

The METI also said the value of retail sales in Japan was up 4.5 percent on year in September, coming in at 12.591 trillion yen. That beat forecasts for a gain of 4.1 percent, which would have been unchanged from the August reading. On a seasonally adjusted monthly basis, retail sales climbed 1.1 percent, slowing from 1.1 percent in the previous month. For the third quarter of 2022, retail sales gained 3.6 percent on year and 1.3 percent on quarter, coming in at 38.140 trillion yen.

In the currency market, the U.S. dollar is trading in the 148 yen-range on Monday.

Elsewhere in Asia, Singapore is down 2.1 percent, while New Zealand, Hong Kong, South Korea, Malaysia, Taiwan and Indonesia are higher by between 0.4 and 1.3 percent each. China is bucking the trend and is down 0.3 percent.

On Wall Street, stocks moved sharply higher over the course of the trading day on Friday following the mixed performance seen in Thursday’s session. The major averages all showed strong moves to the upside, with the Dow reaching a two-month closing high.

The major averages reached new highs going into the close of trading. The Dow surged 828.52 points or 2.6 percent to 32,861.80, the Nasdaq shot up 309.78 points or 2.9 percent to 11,102.45 and the S&P 500 jumped 93.76 points or 2.5 percent to 3,901.06.

Meanwhile, the major European markets turned in a mixed performance on the day. While the U.K.’s FTSE 100 Index fell by 0.4 percent, the German DAX Index inched up by 0.2 percent and the French CAC 40 Index rose by 0.5 percent.

Crude oil prices drifted lower on Friday as worries about the outlook for energy demand resurfaced due to increased Covid-19 restrictions in parts of China. West Texas Intermediate Crude oil futures for December slumped $1.18 or 1.3 percent at $87.90 a barrel. WTI crude futures gained more than 3 percent in the week.

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