Asian stock markets are mostly sharply higher on Tuesday, despite the soft cues overnight from Wall Street, on surging commodities prices and the easing U.S. dollar. Traders remain concerned about the recent acceleration in inflation and look ahead to the release of the minutes of the Federal Reserve’s latest monetary policy meeting and comments on the economy on Wednesday. Asian stocks ended mixed on Monday.
Meanwhile, traders also continue to be cautious amid the surge in daily coronavirus cases in the region, mainly in India and Japan, and the related restrictions and lockdowns in several areas, which will impact the pace of global economic recovery from the pandemic.
The Australian stock market is modestly higher on Tuesday, extending the gains of the previous two sessions, with the benchmark S&P/ASX 200 staying above the 7,000 mark near 14-month highs, as surging commodity prices saw strength in energy and mining stocks. Traders ignored the negative cues overnight from Wall Street as they also await the RBA’s release of the minutes of its monetary policy meeting later in the day.
The benchmark S&P/ASX 200 Index is gaining 36.30 points or 0.52 percent to 7,059.90, after touching a high of 7,083.60 earlier. The broader All Ordinaries Index is up 35.40 points or 0.49 percent to 7,291.20. Australian markets ended slightly higher on Monday.
Among the major miners, BHP Group and Fortescue Metals are gaining almost 2 percent each, while Rio Tinto and Mineral Resources are adding more than 1 percent each. OZ Minerals is surging more than 5 percent.
Among oil stocks are higher after crude oil prices rose overnight. Oil Search, Woodside Petroleum and Santos are gaining almost 2 percent each, while Origin Energy is edging up 0.5 percent.
Among the big four banks, Commonwealth Bank and ANZ Banking are gaining almost 1 percent each, while National Australia Bank and Westpac are edging up 0.4 percent each.
Among tech stocks, Afterpay is losing almost 2 percent, Xero is down more than 1 percent and WiseTech Global is edging down 0.4 percent, while Appen is edging up 0.1 percent.
Gold miners are higher as gold prices hit near five-month highs overnight. Newcrest Mining and Northern Star Resources are gaining more than 2 percent each, while Evolution Mining is adding more than 4 percent, Gold Road Resources is up almost 3 percent and Resolute is gaining almost 5 percent.
In other news, shares in Nuix are surging almost 10 percent after its management met investors to quell fears that its product portfolio was losing ground to competitors. A joint investigation also revealed problems with Nuix’s governance and questions over the quality of its financial accounts before its IPO in December 2020.
Shares in St Barabara are plunging more than 10 percent after the miner cut its full-year production guidance and also expects costs to rise after a soft performance at its Leonora operations in Western Australia, and at the Simberi project in Papua New Guinea.
Shares in Charter Hall Long WALE have been halted as the real estate investment trust launches a $250 million capital raise for acquiring a stake in four properties across three states.
Cement fibre giant James Hardie said it plans to resume ordinary dividends in November after delivering a 9 percent increase in full-year profit to $338.2 million. Global sales were also up 12 percent to $3.73 billion. The stock is down more than 3 percent.
In economic news, the Reserve Bank of Australia released the minutes from its monetary policy meeting on May 4. At the meeting, the bank kept its benchmark lending rate unchanged at the record low of 0.10 percent as widely expected and said it will review the asset purchase program at its July meeting. The bank raised its growth projections and lowered the unemployment rate forecast.
Members of the Reserve Bank of Australia’s monetary policy board acknowledged that the country’s economic recovery from the Covid-19 pandemic was stronger than expected. As a result, Australia’s forecast for gross domestic product was revised higher.
In the currency market, the Aussie dollar is trading at $0.779 on Tuesday.
The Japanese stock market is sharply higher on Tuesday, recouping the losses of the previous session, with the benchmark Nikkei index surging more than 600 points to be above the 29,400 level, as traders ignored the negative cues overnight from Wall Street and the deeper-than-expected local GDP contraction in the first quarter.
However, the upside is capped as the government imposes tougher measures to contain the daily coronavirus infections rate, including restrictions and state of emergency in more prefectures, amid the fourth wave of coronavirus infections driven by more contagious variants.
The benchmark Nikkei 225 Index closed the morning session at 28,402.64, up 577.81 points or 2.08 percent, after touching a high of 28,480.90 earlier. Japanese shares closed notably lower on Monday.
Market heavyweight SoftBank Group and Uniqlo operator Fast Retailing are gaining almost 3 percent each. Among automakers, Honda is gaining more than 3 percent and Toyota is adding almost 2 percent.
In the tech space, Advantest is gaining more than 2 percent and Tokyo Electron is more than 1 percent, while Screen Holdings is edging down 0.3 percent. In the banking sector, Sumitomo Mitsui Financial is gaining almost 2 percent, Mitsubishi UFJ Financial is adding more than 2 percent and Mizuho Financial is up more than 1 percent.
The major exporters are mixed, with Sony edging up 0.2 percent, while Mitsubishi Electric and Canon are gaining more than 1 percent each. Panasonic edging down 0.5 percent
Among the other major gainers, Recruit Holdings is gaining more than 7 percent, while IHI, T&D Holdings and Dai-ichi Life are adding more than 6 percent each. Sumitomo Metal and Japan Steel Toyobo are up almost 6 2 percent each, while Ajinomoto is rising more than 5 percent. Kobe Steel, Isetan Mitsukoshi and KDDI are gaining almost 5 percent, while JCG Holding, Mitsui E&S Holdings and JFE Holdings are adding more than 4 percent.
Conversely, Nisshin Seifun is losing 5 percent and Nippon Light metal is declining more than 4 percent, while Osaka Gas, Tokyo Gas and NEC are down more than 2 percent each.
In other news, the Tokyo Stock Exchange is planning to extend trading hours beyond the current 3 p.m. so that it can stay open longer to lure more domestic retailers who trade after work and foreign investors in European and U.S. time zones, the Nikkei reported.
In economic news, Japan’s gross domestic product contracted an annualized 5.1 percent in the first quarter of 2021, the Cabinet Office said in Tuesday’s preliminary report. That missed expectations for a decline of 4.6 percent following the downwardly revised 11.6 percent increase in the previous three months (originally 11.7 percent). On a quarterly basis, GDP sank 1.3 percent – again missing expectations for a drop of 1.2 percent following the 2.8 percent increase in the three months prior. Capital expenditure was down 1.4 percent on quarter, shy of expectations for a gain of 1.1 percent following the 4.3 percent jump in the previous quarter.
In the currency market, the U.S. dollar is trading in the lower 109 yen-range on Tuesday.
Elsewhere in Asia, Taiwan is skyrocketing 4 percent and South Korea is up 1.1 percent, while Hong Kong and Singapore are gaining 1.2 percent each. Malaysia and China are up 0.1 each. New Zealand is flat. Indonesia is bucking the trend and is down 0.3 percent.
On Wall Street, stocks regained ground after an early move to the downside on Monday but still ended the day in negative territory. The major averages partly offset the notable rebound seen to close out the previous week.
After falling by as much as 200 points, the Dow ended the day down by just 54.34 points or 0.2 percent at 34,327.79. The Nasdaq slid 50.93 points or 0.4 percent to 13,379.05 and the S&P 500 fell 10.56 points or 0.3 percent to 4,163.29.
The major European markets also saw modest weakness on the day. While the French CAC 40 Index dipped by 0.3 percent, the U.K.’s FTSE 100 Index and the German DAX Index edged down by 0.2 percent and 0.1 percent, respectively.
Crude oil prices rose sharply Monday on hopes energy demand will pick up as the U.S. and European economies show signs of a quick recovery from the pandemic. West Texas Intermediate Crude oil futures for June rose $0.90 or 1.4 percent at $66.27 a barrel.
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