Asian Markets Mostly Lower Amid Dollar, Yields Surge

The strength of the US dollar against major currencies in the region and a surge in treasury yields to its highest level in almost sixteen years has caused Asian stock markets to trade sharply lower, following the mixed cues from Wall Street overnight. Traders also await key monthly US employment data later in the week for cues on the outlook for interest rates. Asian markets closed mostly lower on Monday.

Adding to the losses in the previous sessions, the Australian stock market is sharply lower on Tuesday, following the mixed cues from Wall Street overnight. The benchmark S&P/ASX 200 breached the 7,000 mark to fall to a six-month low, with weakness across global markets amid a strong US dollar and a surge in treasury yields.

Traders also cautiously await the Reserve Bank’s policy decision later in the day under new governor Michael Bullock.

The benchmark S&P/ASX 200 Index is losing 90.00 points or 1.28 percent to 6,943.20, after hitting a low of 7,908.30 earlier. The broader All Ordinaries Index is down 95.30 points or 1.32 percent to 7,140.20. Australian stocks closed modestly lower on Monday.

Among the major miners, BHP Group is losing more than 2 percent and Mineral Resources is slipping more than 3 percent, while Rio Tinto and Fortescue Metals are declining almost 2 percent each.

Oil stocks are mostly lower. Santos and Woodside Energy are sliding almost 4 percent each, while Origin Energy is losing more than 1 percent and Beach energy is declining almost 5 percent.

Among tech stocks, Xero is slipping almost 1 percent, WiseTech Global is losing more than 1 percent, Zip is declining almost 5 percent, Afterpay owner Block is down almost 3 percent and Appen is plunging almost 7 percent.

Gold miners are mostly lower. Northern Star resources, Resolute Mining, Gold Road Resources, Evolution Mining and Newcrest Mining are all losing almost 4 percent each.

Among the big four banks, National Australia Bank is losing almost 1 percent, while Commonwealth Bank, ANZ Banking and Westpac are edging down 0.3 to 0.5 percent each.

In economic news, the Reserve Bank of Australia will wrap up its monetary policy meeting and then announce its decision on interest rates. The RBA is expected to keep its benchmark lending rate unchanged at 4.10 percent for a fourth consecutive month.

In the currency market, the Aussie dollar is trading at $0.634 on Tuesday.

Extending the losses in the previous three sessions, the Japanese stock market is sharply lower on Tuesday, with the Nikkei 225 falling below the 31,400 level, following the mixed cues from Wall Street overnight, with weakness across global markets amid a strong US dollar and a surge in treasury yields.

The benchmark Nikkei 225 Index closed the morning session at 31,365.92, down 393.92 points or 1.24 percent, after hitting a low of 31,260.99 earlier. Japanese shares ended modestly lower on Monday.

Market heavyweight SoftBank Group is losing almost 1 percent and Uniqlo operator Fast Retailing is down 1.5 percent. Among automakers, Honda is losing 1.5 percent and Toyota is declining more than 2 percent.

In the tech space, Advantest is edging down 0.1 percent, Screen Holdings is losing more than 2 percent and Tokyo Electron is losing almost 1 percent.

In the banking sector, Sumitomo Mitsui Financial and Mitsubishi UFJ Financial are losing almost 1 percent each, while Mizuho Financial are edging down 0.5 percent.

The major exporters are mostly lower. Canon is losing almost 2 percent, Panasonic is down almost 1 percent and Mitsubishi Electric is declining almost 3 percent, while Sony is edging up 0.3 percent.

Among the other major losers, Inpex is plunging more than 6 percent and Nippon Sheet Glass is slipping more than 5 percent, while JGC Holdings, ENEOS Holdings and Mazda Motor are losing almost 5 percent each. Idemitsu Kosan, Hino Motors, Tokyo Electric Power, Yamaha Motor, Kobe Steel, Aozora Bank and Mitsubishi Motors are all slipping more than 4 percent each, while Mitsui E&S, Subaru and Pacific Metals are declining almost 4 percent each.

Conversely, there are no other major gainers.

In economic news, the monetary base in Japan jumped 5.6 percent on year in September, the Bank of Japan said on Tuesday – coming in at 669.860 trillion yen. That shattered expectations for an increase of 1.6 percent following the upwardly revised 1.2 percent increase in August (originally 1.1 percent). The adjusted monetary base surged 31.5 percent to 676.105 trillion yen. For the third quarter of 2023, the monetary base climbed 1.8 percent on year.

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

Elsewhere in Asia, Hong Kong is down 3.2 percent, while New Zealand, Singapore and Taiwan are lower by between 0.3 and 0.8 percent each. Malaysia and Indonesia are up 0.3 and 0.1 percent, respectively. China remains closed for National Day and South Korea is closed for an extended Chuseok Festival.

On Wall Street, stocks turned in another mixed performance during trading on Monday after ending last Friday’s trading on opposite sides of the unchanged line. While the tech-heavy Nasdaq ended the day firmly in positive territory, the Dow dipped to its lowest closing level in four months.

The Nasdaq climbed 88.45 points or 0.7 percent to 13,307.77 and the S&P 500 crept up 0.34 points or less than a tenth of a percent to 4,288.39, but the Dow slipped 74.15 points or 0.2 percent to 33,433.35.

Meanwhile, the major European markets moved to the downside on the day. While the U.K.’s FTSE 100 Index tumbled by 1.3 percent, the French CAC 40 Index and the German DAX Index both slumped by 0.9 percent.

Crude oil prices fell sharply on Monday, hurt by a stronger dollar and concerns about prospects of rising supplies in the market. West Texas Intermediate Crude oil futures for November sank $1.97 or 2.2 percent at $88.82 a barrel.

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