Asian Markets Trade Mostly Lower

Asian stock markets are mostly lower on Friday, despite the mostly positive cues from Wall Street overnight, as lingering concerns about economic slowdown, and fears of a U.S. debt default rendered the mood bearish. Some relief is seen as lawmakers move closer to a deal to raise debt limit and cap spending for two years. Asian markets ended mostly lower on Thursday.

Reflecting the default concerns, Fitch Ratings placed the United States “AAA” credit on “rating watch negative,” signaling downside risks to U.S. creditworthiness.

House Speaker Kevin McCarthy said that some progress had been made but several issues remained unresolved in negotiations, as the deadline ticked closer to raise the federal government’s $31.4 trillion borrowing limit or risk default.

With just over a week left – including a holiday weekend – U.S. Treasury Secretary Janet Yellen reiterated her dire warning that the U.S. could have a hard time paying its bills.

The Australian stock market is slightly lower in choppy trading on Friday, extending the losses in the previous four sessions, with the benchmark S&P/ASX 200 staying below the 7,200 level, despite the mostly positive cues from Wall Street overnight, dragged by losses in gold miners and energy stocks and tumbling bullion and crude oil prices.

The benchmark S&P/ASX 200 Index is losing 3.20 points or 0.05 percent to 7,135.00, after hitting a low of 7,129.00 and a high of 7,143.40 earlier. The broader All Ordinaries Index is down 3.10 points or 0.04 percent to 7,313.60. Australian markets ended significantly lower on Thursday.

Among major miners, Fortescue Metals is gaining more than 1 percent and BHP Group is edging up 0.2 percent, while Mineral Resources and Rio Tinto are adding almost 1 percent each.

Oil stocks are weak. Santos and Woodside Energy are losing almost 1 percent each, while Beach energy is declining almost 2 percent. Origin Energy is flat.

Among tech stocks, Afterpay owner Block is losing 4.5 percent and Xero is down almost 1 percent, while WiseTech Global is edging up 0.3 percent and Appen is gaining almost 1 percent. Zip is flat.

Among the big four banks, Westpac, ANZ Banking and National Australia Bank are edging up 0.2 to 0.4 percent each, while Commonwealth Bank is gaining almost 1 percent.

Gold miners are weak. Gold Road Resources, Northern Star Resources and Evolution Mining are losing almost 1 percent each, while Newcrest Mining is down more than 1 percent and Resolute Mining is declining almost 2 percent.

In the currency market, the Aussie dollar is trading at $0.651 on Friday.

The Japanese stock market is significantly higher on Friday, extending the gains in the previous session, with the benchmark Nikkei 225 moving a tad above the 31,100 level to climb back to fresh 33-year highs, following the mostly positive cues from Wall Street overnight, boosted by gains across most sectors, led by technology stocks.

The benchmark Nikkei 225 Index closed the morning session at the day’s high of 31,101.60, up 300.47 points or 0.98 percent. Japanese stocks closed notably higher on Thursday.

Market heavyweight SoftBank Group is edging up 0.5 percent, while Uniqlo operator Fast Retailing is edging down 0.1 percent. Among automakers, Honda is edging up 0.2 percent and Toyota is edging up 0.3 percent.

In the tech space, Advantest is gaining almost 3 percent and Screen Holdings is surging more than 6 percent, while Tokyo Electron is adding almost 5 percent.

In the banking sector, Mitsubishi UFJ Financial and Sumitomo Mitsui Financial are edging down 0.3 to 0.4 percent each, while Mizuho Financial is edging up 0.1 percent.

Among major exporters, Panasonic is edging up 0.3 percent, while Mitsubishi Electric and Sony are gaining almost 1 percent each. Canon is edging down 0.1 percent.

Among the other major gainers, Kawasaki Heavy Industries and Taiyo Yuden are surging almost 6 percent each, while Renesas Electronics, Marubeni, Hoya, Keisei Electric Railway and Toppan are gaining almost 4 percent each. Resonac Holdings, Fujikura and Sumco are adding more than 3 percent each, while Central Japan Railway and Mitsubishi Heavy Industries are up almost 3 percent each.

Conversely, there are no other major losers.

In economic news, overall consumer prices in the Tokyo region of Japan were up 3.2 percent on year in May, the Ministry of Internal Affairs and Communications said on Friday. That was shy of expectations for an increase of 3.9 percent and was down from 3.5 percent in April.

Core CPI, which excludes the volatile costs of food, also was up 3.2 percent on year in May – beneath expectations for a rise of 3.3 percent and down from 3.5 percent in the previous month.

Meanwhile, producer prices in Japan were up 1.6 percent on year in April, the Bank of Japan said on Friday. That exceeded expectations for an increase of 1.4 percent following the upwardly revised 1.7 percent gain in March (originally 1.6 percent). On a monthly basis, producer prices rose 0.2 percent – easing from the 0.6 percent gain in the previous month.

In the currency market, the U.S. dollar is trading in the higher 139 yen-range on Friday.

Elsewhere in Asia, New Zealand, China, Singapore, Malaysia and Taiwan are lower by between 0.1 and 0.8 percent each, while South Korea and Indonesia are up 0.3 and 0.1 percent, respectively. Hong Kong is closed for Vesak Day holiday.

On Wall Street, stocks moved mostly higher during trading on Thursday, regaining ground after moving sharply lower on Tuesday and Wednesday. The Nasdaq showed a particularly strong upward move, reflecting strength in the tech sector.

The Nasdaq surged 213.93 points or 1.7 percent to 12,698.09, bouncing back near the nine-month closing high set on Monday. The S&P 500 also jumped 36.04 points or 0.9 percent to 4,151.28, while the narrower Dow bucked the downtrend and edged down 35.27 points or 0.1 percent to 32,764.65.

Meanwhile, the major European markets also moved to the downside on the day. While the U.K.’s FTSE 100 Index declined by 0.7 percent, the French CAC 40 Index and the German DAX Index both dipped by 0.3 percent.

Crude oil prices fell sharply Thursday, snapping a three-day winning streak, after Russia’s Deputy Prime Minister said Russia won’t agree on any additional cut in crude production. West Texas Intermediate Crude oil futures for July ended down $2.51 or 3.4 percent at $71.83 a barrel.

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