Asian stock markets are trading mostly lower on Friday, following the broadly negative cues from the global markets overnight, amid rising concerns about inflation, potential interest rate hikes and slowing economic growth. Investors also looked ahead to the crucial inflation data from the U.S. due later in the day. Asian markets ended mostly lower on Thursday.
The US Labor Department is set to release a report on consumer price inflation for May, which could have an impact on the outlook for monetary policy ahead of the Federal Reserve’s decision on interest rates next Wednesday. The White House has said it expects U.S. inflation to be “elevated.”
Reports saying Shanghai and Beijing have imposed fresh COVID-related curbs just a few days after relaxing restrictions also weighed on market sentiment. This has added more pressure to global supply chains, which in turn worsens inflation.
The Australian stock market is significantly lower on Friday, extending the losses in the previous session, with the benchmark S&P/ASX 200 falling below the 7,000 mark, following the broadly negative cues from Wall Street overnight, dragged by weakness in materials, energy and technology stocks, partially offset by gains in financial stocks.
Materials and energy stocks were hit by lower commodity prices amid reports of China imposing fresh COVID-19 curbs just a few days after relaxing it, while technology stocks mirrored their peers on tech-heavy Nasdaq.
The benchmark S&P/ASX 200 Index is losing 55.60 points or 0.79 percent to 6,964.10, after hitting a low of 6,934.00 earlier. The broader All Ordinaries Index is down 68.50 points or 0.95 percent to 7,171.90. Australian markets ended sharply lower on Thursday.
Among major miners, Rio Tinto is declining almost 4 percent and Fortescue Metals is sliding more than 4 percent, while BHP Group, OZ Minerals and Mineral Resources are slipping almost 3 percent each.
Oil stocks are lower. Origin Energy and Santos are losing more than 1 percent each, while Beach energy is down 1.5 percent and Woodside Energy is declining more than 2 percent.
Among tech stocks, WiseTech Global is losing more than 3 percent, Xero is edging down 0.5 percent, Afterpay owner Block is sliding more than 7 percent, Appen is declining almost 2 percent and Zip is slipping almost 1 percent.
Among the big four banks, Commonwealth Bank is gaining almost 1 percent and ANZ Banking is adding almost 2 percent, while Westpac and National Australia Bank are up more than 1 percent each.
Gold miners are lower. Northern Star Resources, Gold Road Resources and Evolution Mining are losing more than 2 percent each, while Resolute Mining is sliding almost 5 percent and Newcrest Mining is down 1.5 percent.
In the currency market, the Aussie dollar is trading at $0.710 on Friday.
The Japanese stock market is sharply lower on Friday, snapping the five-session winning streak, with the benchmark Nikkei 225 falling below the 27,900 level, following the broadly negative cues from Wall Street overnight, with losses across most sectors as trades booked profits after the recent winning streak.
Materials and energy stocks were also hit by lower commodity prices amid reports of China imposing fresh COVID-19 curbs just a few days after relaxing it, while technology stocks mirrored their peers on tech-heavy Nasdaq.
The benchmark Nikkei 225 Index closed the morning session at 27,848.79, down 397.74 points or 1.41 percent, after hitting a low of 27,805.45 earlier. Japanese shares closed slightly higher on Thursday.
Market heavyweight SoftBank Group is losing almost 3 percent and Uniqlo operator Fast Retailing is declining more than 2 percent. Among automakers, Honda is edging down 0.3 percent and Toyota is declining almost 1 percent.
In the tech space, Advantest is losing almost 4 percent, Screen Holdings is declining almost 3 percent and Tokyo Electron is down more than 2 percent.
In the banking sector, Mitsubishi UFJ Financial is flat, Mizuho Financial is losing almost 1 percent and Sumitomo Mitsui Financial is edging down 0.2 percent.
Among major exporters, Panasonic is losing more than 1 percent, while Sony, Canon and Mitsubishi Electric are edging down 0.2 to 0.5 percent each.
Among the other major losers, Pacific Metals is plunging almost 5 percent and Kubota is losing more than 4 percent, while Sumitomo Metal Mining, Daiichi Sankyo, Fanuc, NTN, Tokyo Electric Power, Ebara, Eisai and Hino Motors are all down more than 3 percent each. OKUMA, Nippo and Yaskawa Electric are slipping almost 3 percent each.
Conversely, Taiheiyo Cement is soaring almost 9 percent, Sumitomo Osaka Cement is surging more than 7 percent, Kyowa Kirin is gaining more than 4 percent and Sekisui House is adding almost 3 percent each.
In economic news, producer prices in Japan were up 9.1 percent on year in May, the Bank of Japan said on Friday. That was shy of expectations for an increase of 9.8 percent, which would have been unchanged from the previous month after a downward revision from 10.0 percent. On a monthly basis, producer prices were unchanged – again missing forecasts for an increase of 0.5 percent and down from the upwardly revised 1.3 percent increase in April (originally 1.2 percent).
In the currency market, the U.S. dollar is trading in the lower 134 yen-range on Friday.
Elsewhere in Asia, New Zealand, Hong Kong, Singapore, Malaysia, South Korea, Taiwan and Indonesia are lower by between 0.7 to 1.2 percent each. China is bucking the trend and is edging up 0.1 percent.
On Wall Street, stocks moved sharply lower over the course of the trading session on Thursday after initially showing a lack of direction. With the steep drop on the day, the major averages extended the downward move seen in the previous session.
The major averages saw further downside going into the close, ending the session at their worst levels of the day. The Dow tumbled 638.11 points or 1.9 percent to 32,272.79, the Nasdaq plunged 332.05 points or 2.8 percent to 11,754.23 and the S&P 500 dove 97.95 points or 2.4 percent to 4,017.82.
The major European markets also moved to the downside on the day. While the German DAX Index tumbled 1.7 percent, the U.K.’s FTSE 100 Index and the French CAC 40 Index slumped by 1.5 percent and 1.4 percent, respectively.
Crude oil prices drifted lower on Thursday as demand concerns resurfaced following authorities in Shanghai imposing new Covid-related restrictions. West Texas Intermediate Crude oil futures for July ended down by $0.60 or 0.5 percent at $121.51 a barrel.
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