Asian Markets Mostly Higher Amid Cautious Trade

Asian stock markets are mostly higher on Tuesday, despite the absence of fresh cues from Wall Street, which was closed overnight for a holiday. The coronavirus infection rate in the region is keeping the underlying mood cautious as it is bound to impact the pace of global economic recovery from the pandemic. Asian stocks ended mixed on Monday.

The Australian stock market is modestly lower on Tuesday, extending the losses of the previous session, with the benchmark S&P/ASX 200 staying just above the 7,100 level, with the absence of fresh cues from Wall Street. Gold miners and banks are weighing down the market with mining giants and energy stocks offering resistance.

Traders remain concerned about the rising COVID-19 infection cases in the country’s second-most populous state, which went into a 7-day lockdown over the weekend and is expected to be extended to contain the infection rate.

Traders are also cautious ahead of the Reserve Bank of Australia’s monetary policy decision later in the day and the GDP data due Wednesday.

The benchmark S&P/ASX 200 Index is losing 21.30 points or 0.30 percent to 7,140.30, after hitting a low of 7,117.50 earlier. The broader All Ordinaries Index is down 21.00 points or 0.28 percent to 7,385.70. Australian markets ended slightly lower on Monday.

Among the major miners, BHP Group is gaining almost 1 percent each, Rio Tinto is adding more than 1 percent, while OZ Minerals and Mineral Resources are up almost 2 percent each. Fortescue Metals is rising more than 3 percent.

Oil stocks are higher after crude oil prices climbed overnight. Oil Search, Santos and Origin Energy are gaining almost 1 percent each, while Beach energy is up almost 2 percent. Woodside Petroleum is adding more than 1 percent.

Among the big four banks, ANZ Banking, National Australia Bank and Westpac are losing almost 1 percent each, while Commonwealth Bank is edging down 0.3 percent.

Among tech stocks, Afterpay and Xero are edging down 0.4 percent, while Appen is losing almost 3 percent. WiseTech Global is gaining almost 1 percent.

Gold miners are mostly lower, with Resolute Mining and Gold Road Resources losing more than 2 percent, while Northern Star Resources and Evolution Mining are down more than 1 percent each. Newcrest Mining is edging down 0.4 percent.

In other news, shares in Nine Entertainment Co Holdings is up more than 2 percent after it signed multi-year content-supply deals with Google and Facebook under Australia’s news media bargaining code. Terms of the deal were not disclosed. Rivals Seven West Media Ltd and News Corp also signed similar deals.

In economic news, the manufacturing sector in Australia continued to expand in May, and at a faster pace, the latest survey from IHS Markit Economics revealed on Tuesday with a survey record manufacturing PMI score of 60.4. That’s up from 59.7 in April and it moves further above the boom-or-bust line of 50 that separates expansion from contraction.

Separately, the latest survey from the Australian Industry Group showed on Tuesday that the manufacturing sector in Australia continued to expand in May, and at a faster pace, with a Performance of Manufacturing Index score of 61.8. That’s up from 61.7 in April and it moves further above the boom-or-bust line of 50 that separates expansion from contraction. This was the highest monthly result for the Australian PMI since March 2018 and a eighth consecutive month of recovery from the severe disruptions of Covid-19 in the second quarter of 2020.

The Reserve Bank of Australia will also wrap up its monetary policy meeting on Tuesday and then announce its decision on interest rates. The RBA is widely expected to keep its benchmark lending rate unchanged at the record low 0.10 percent.

In the currency market, the Aussie dollar is trading at $0.776 on Tuesday.

The Japanese stock market is notably lower after paring early gains in choppy trading on Tuesday, extending the losses of the previous session, with the benchmark Nikkei index above the 28,700 level, following the absence of fresh cues from Wall Street. Traders remain concerned and cautious after the Japanese government on Friday extended the COVID-19 state of emergency in Tokyo, Osaka and seven other prefectures by three weeks to June 20.

The benchmark Nikkei 225 Index closed the morning session at 28,693.97, down 166.11 points or 0.58 percent, after touching a high of 29,075.47 and a low of 28,611.25 earlier. Japanese shares closed notably lower on Monday.

Market heavyweight SoftBank Group is losing more than 1 percent and Uniqlo operator Fast Retailing is edging down 0.2 percent. Among automakers, Honda is losing 0.5 percent, while Toyota is gaining almost 2 percent.

In the tech space, Advantest is losing more than 1 percent and Tokyo Electron is edging down 0.3 percent, while Screen Holdings is up almost 2 percent. In the banking sector, Mizuho Financial is edging up 0.4 percent, while Mitsubishi UFJ Financial and Sumitomo Mitsui Financial are edging down 0.2 percent.

The major exporters are mixed, with Sony and Canon edging down 0.2 percent, while Panasonic and Mitsubishi Electric are losing almost 1 percent.

Among the other major losers, JFE Holdings, Tokai Carbon and Casio Computer are losing more than 2 percent each, while NSK, Kajima, Pacific Metals, Kirin Holdings, Citizen Watch, GS Yuasa, Nippon Steel and Nikon are all down almost 2 percent. M3, recruit Holdings and Toppan printing are declining more than 1 percent each.

Conversely, IHI is gaining more than 4 percent and Toray Industries are up almost 3 percent, while Mitsubishi Heavy Industries, Sumco and Sumitomo Electric Industries are adding more than 2 percent each.

In economic news, the manufacturing sector in Japan continued to improve in May, the latest survey from Jibun Bank revealed on Tuesday with a revised manufacturing PMI score of 53.0. That’s up from 52.5 in April and it moves further above the boom-or-bust line of 50 that separates expansion from contraction.

In the currency market, the U.S. dollar is trading in the lower 109 yen-range on Tuesday.

Elsewhere in Asia, Indonesia is surging 1.7 percent, while New Zealand, South Korea Singapore, Taiwan and China are higher by between 0.2 and 0.4 percent. Singapore and Hong Kong are flat. Malaysia and China are bucking the trend and are down 0.1 and 0.5 percent, respectively. Overnight, the U.S. markets were closed for Memorial Day holiday.

European stocks closed weak on Monday with markets in the U.K. closed for Bank Holiday. However, Germany’s DAX slid 0.64 percent and France’s CAC 40 ended lower by 0.57 percent.

Crude oil futures climbed higher on Monday amid expectations that demand will outstrip supply. The West Texas Intermediate Crude oil futures for July climbed $0.39 or 0.9% to $66.91 a barrel.

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