Asian Markets Mostly Lower

Despite the broadly positive cues from global markets overnight, the Asian stock markets are trading mostly lower, as traders reacted to some downbeat Chinese manufacturing and non-manufacturing activity data. Ongoing concerns about the outlook for interest rates and the conflict in Middle East is also weighing on the markets. Asian markets closed mixed on Monday.

Traders now look ahead to the US Fed’s highly anticipated monetary policy announcement on Wednesday, where the Fed widely expected to leave interest rates unchanged, but traders will pay close attention to the accompanying statement for clues about the potential for further rate hikes.

CME Group’s FedWatch Tool is currently indicating a 98.2 percent chance the Fed will leave rates unchanged this week and a 74.1 percent chance rates will remain unchanged in December.

Rebounding from near 12-month lows and recouping the losses in the previous session, the Australian stock market is modestly higher on Tuesday, following the broadly positive cues from global markets overnight. The benchmark S&P/ASX 200 moved to a tad below the 6,800 level, with gains in financial and energy stocks partially offsetting losses in mining and stocks.

The benchmark S&P/ASX 200 Index is gaining 8.00 points or 0.12 percent to 6,780.90, after touching a high of 6,816.40 earlier. The broader All Ordinaries Index is up 6.40 points or 0.09 percent to 6,966.60. Australian stocks closed significantly lower on Monday.

Among the major miners, BHP Group, Fortescue Metals and Rio Tinto are edging down 0.4 to 0.5 percent each, while Mineral Resources is losing more than 2 percent.

Oil stocks are mostly higher. Santos is edging up 0.5 percent and Beach energy is adding more than 1 percent, while Origin Energy is edging down 0.3 percent. Woodside Energy is flat.

Among tech stocks, Afterpay owner, Xero and WiseTech Global are edging up 0.1 to 0.2 percent each, while Zip is advancing more than 1 percent. Block is losing more than 3 percent. Appen is flat.

Gold miners are mostly lower. Resolute Mining is declining almost 4 percent, Northern Star resources is losing almost 2 percent, Gold Road Resources is edging down 0.4 percent and Evolution Mining is down 1.5 percent. Newcrest Mining is flat.

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

In economic news, private sector credit in Australia was up 0.5 percent on month in September, the Reserve Bank of Australia said on Tuesday – up from 0.4 percent in August. On a yearly basis, credit climbed 4.9 percent.

In the currency market, the Aussie dollar is trading at $0.635 on Tuesday.

The Japanese stock market is trading modestly lower on Tuesday, extending the losses in the previous session, with the Nikkei 225 staying below the 30,700 level, despite the broadly positive cues from global markets overnight, with weakness in index heavyweights and technology stocks partially offset by gains in financial stocks.

The benchmark Nikkei 225 Index closed the morning session at 30,649.44, down 47.52 points or 0.15 percent, after hitting a low of 30,552.65 earlier. Japanese shares ended significantly lower on Monday.

Market heavyweight SoftBank Group is losing almost 1 percent and Uniqlo operator Fast Retailing is edging down 0.4 percent. Among automakers, Honda is losing almost 2 percent and Toyota is edging down 0.4 percent.

In the tech space, Advantest is losing 3.5 percent, Screen Holdings is down more than 2 percent and Tokyo Electron is declining almost 2 percent.

In the banking sector, Sumitomo Mitsui Financial is gaining 1.5 percent, Mitsubishi UFJ Financial is adding more than 2 percent and Mizuho Financial is advancing almost 3 percent.

The major exporters are mixed. Canon and Sony are gaining almost 1 percent each, while Panasonic is plunging more than 9 percent and Mitsubishi Electric is losing almost 1 percent.

Among the other major losers, Renesas Electronics is losing more than 5 percent, NEC is down almost 5 percent and Lasertec is declining almost 3 percent.

Conversely, Nippon Electric Glass is skyrocketing almost 10 percent and Nisshin Seifun Group is surging almost 5 percent, while Resona Holdings and Osaka Gas are gaining almost 4 percent each. Sumitomo Pharma, Shizuoka Financial and Dai-ichi Life are up more than 3 percent each, while Fukuoka Financial, Seven & I Holdings, Concordia Financial, Chiba Bank, Aozora Bank, Toho and T&D Holdings are advancing almost 3 percent each.

In economic news, Japan posted a seasonally adjusted unemployment rate of 2.6 percent in September, the Ministry of Internal Affairs and Communications said on Tuesday. That was in line with expectations and down from 2.7 percent in August. The jobs-to-applicant ratio was 1.29 – unchanged from the August reading but shy of expectations for 1.30.

Industrial output in Japan was up a seasonally adjusted 0.2 percent on month in September, the Ministry of Economy, Trade and Industry or METI said on Tuesday – well shy of forecasts for an increase of 2.5 percent following the 0.7 percent decline in August. On a yearly basis, industrial production sank 4.6 percent after dropping 4.4 percent in the previous month.

The METI also said the value of retail sales in Japan climbed 5.8 percent on year in September, coming in at 13.357 trillion yen. That missed expectations for an increase of 5.9 percent and was down from 7.0 percent in August.

On a seasonally adjusted monthly basis, retail sales eased 0.1 percent after rising 0.2 percent in August. For the third quarter of 2023, retail sales gained 6.6 percent on year and 2.3 percent on quarter at 40.693 trillion yen.

Further, the Bank of Japan will wrap up its monetary policy meeting on Tuesday and then announce its decision on interest rates. The BoJ is widely expected to keep its benchmark lending rate unchanged at the record low -0.10 percent.

In the currency market, the U.S. dollar is trading in the lower 149 yen-range on Tuesday.

Elsewhere in Asia, China, Hong Kong, South Korea, Taiwan and Indonesia are lower by between 0.4 and 1.3 percent each, while New Zealand and Singapore are up 0.3 and 0.2 percent, respectively. Malaysia is relatively flat.

On Wall Street, stocks moved sharply higher over the course of the trading session on Monday, partly offsetting the steep losses posted last week. The major averages all showed significant moves to the upside following the mixed performance seen last Friday.

The major averages pulled back off their highs going into the close but held on to strong gains. The Dow spiked 511.37 points or 1.6 percent to 32,928.96, the Nasdaq jumped 146.47 points or 1.2 percent to 12,789.48 and the S&P 500 surged 49.45 points or 1.2 percent to 4,166.82.

The major European markets all also moved to the upside on the day. While the U.K.’s FTSE 100 Index climbed 0.5 percent, the French CAC 40 Index rose by 0.4 percent and the German DAX Index edged up by 0.2 percent.

Crude oil prices declined sharply Monday amid easing concerns about supply disruptions from the Middle East region. Investors are also looking ahead to the Federal Reserve’s monetary policy announcement and the non-farm payroll data for October on Friday. West Texas Intermediate Crude oil futures for December slumped $3.23 or 3.8 percent at $82.31 a barrel.

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