Asian Markets Track Wall Street Higher

Asian stock markets are trading mostly higher on Friday, following the broadly positive cues from Wall Street overnight, as bond yields declined on expectations that the US Fed will cut interest rates this year to prevent a bigger slowdown in the world’s largest economy. Asian markets ended mostly lower on Thursday.

Federal Reserve Bank of Atlanta President Raphael Bostic said he continues to expect one interest rate cut this year in the fourth quarter as inflation shows progress.

Traders also seemed reluctant to make significant moves ahead of the release of key US inflation data later in the day. The report is expected to show a modest slowdown in the annual rate of consumer price growth and could have a significant impact on the outlook for interest rates.

Recouping some of the losses in the previous two sessions, the Australian stock market is modestly higher on Friday, following the broadly positive cues from Wall Street overnight. The benchmark S&P/ASX 200 is moving up to near the 7,800 level, with gains across most sectors led by technology, financial and energy stocks.

The benchmark S&P/ASX 200 Index is gaining 37.10 points or 0.48 percent to 7,796.70, after touching a high of 7,819.00 earlier. The broader All Ordinaries Index is up 38.20 points or 0.48 percent to 8,041.00. Australian markets ended modestly lower on Thursday.

Among major miners, BHP Group and Fortescue Metals are losing almost 1 percent each, while Rio Tinto and Mineral Resources are down more than 1 percent each.

Oil stocks are mostly higher. Santos and Origin Energy are edging up 0.1 to 0.5 percent each, while Woodside Energy is gaining almost 1 percent and Beach energy is adding more than 1 percent.

Among tech stocks, Appen is gaining more than 1 percent, Zip is adding more than 2 percent, Xero is edging up 0.4 percent and WiseTech Global is advancing almost 2 percent, while Afterpay owner Block is edging down 0.2 percent.

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

Gold miners are mostly higher. Evolution Mining, Resolute Mining, Northern Star Resources and Gold Road Resources are edging up 0.3 to 0.4 percent each, while Newmont is advancing more than 1 percent.

In other news, shares in IAG are surging more than 7 percent after the insurance group said it has renegotiated deals with global reinsurers and confirmed it is on track to achieve profits and margins in line with prior guidance in financial 2024.

In economic news, overall private sector credit in Australia was up 0.4 percent on month in May, the Reserve Bank of Australia said on Friday – in line with expectations and easing from 0.5 percent in April. On a yearly basis, overall private sector credit was up 5.2 percent.

In the currency market, the Aussie dollar is trading at $0.664 on Friday.

Reversing the losses in the previous session, the Japanese stock market is significantly higher on Friday, following the broadly positive cues from Wall Street overnight. The benchmark Nikkei 225 is moving above the 39,700 level, with gains across most sectors led by index heavyweights and financial stocks.

The benchmark Nikkei 225 Index closed the morning session at 39,727.91, up 386.37 points or 0.98 percent, after touching a high of 39,783.70 earlier. Japanese stocks closed significantly lower on Thursday.

Market heavyweight SoftBank Group is gaining more than 2 percent and Uniqlo operator Fast Retailing is edging up 0.3 percent. Among automakers, Honda is gaining almost 1 percent and Toyota is adding more than 1 percent.

In the tech space, Advantest is gaining 2.5 percent, Tokyo Electron is adding more than 1 percent and Screen Holdings Retailing is edging up 0.5 percent.

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

Among major exporters, Mitsubishi Electric is gaining almost 3 percent, Panasonic is adding almost 1 percent and Sony are advancing almost 2 percent, while Canon is edging down 0.3 percent.

Among other major gainers, Sumitomo Pharma and IHI are surging almost 6 percent each, while Ebara and MS&AD Insurance are gaining almost 5 percent each. T&D Holdings is adding more than 3 percent, while Tokio Marine and Itochu is advancing almost 3 percent each.

Conversely, Hino Motors is losing almost 5 percent.

In economic news, the unemployment rate in Japan came in at a seasonally adjusted 2.6 percent in May, the Ministry of Internal Affairs and Communications said on Friday. That was in line with expectations and unchanged from the April reading. The job-to-applicant ratio slipped to 1.24, shy of expectations for 1.26, which would have been unchanged. The participation rate ticked up for 63.3 percent, beating forecasts for 63.2 percent and up from 63.1 percent in the previous month.

The Ministry of Economy, Trade and Industry said on Friday that industrial production in Japan was up a seasonally adjusted 2.8 percent on month in May,. That beat forecasts for an increase of 2.0 percent following the 0.9 percent contraction in April. On a yearly basis, industrial production was up 0.3 percent.

In the currency market, the U.S. dollar is trading in the higher 160 yen-range on Friday.

Elsewhere in Asia, China, Hong Kong, South Korea, Malaysia, Taiwan and Indonesia are higher by between 0.1 and 0.8 percent each. Singapore is relatively flat. New Zealand is closed for New Year’s Day.

On Wall Street, stocks turned in a lackluster performance during trading on Thursday, with traders looking ahead to the release of closely watched inflation data. The major averages spent the day bouncing back and forth across the unchanged line.

The major averages eventually ended the session modestly higher. The Dow crept up 36.25 points or 0.1 percent to 39,164.06, the Nasdaq rose 53.53 points or 0.3 percent to 17,858.68 and the S&P 500 inched up 4.97 points or 0.1 percent to 5,482.87.

Meanwhile, the major European markets turned in a mixed performance on the day. While the German DAX Index rose 0.3 percent, the U.K.’s FTSE 100 Index fell by 0.6 percent and the French CAC 40 Index slumped by 1.0 percent.

Crude oil prices settled higher Thursday on hopes about the outlook for demand, and on concerns about possible supply disruptions due to tensions in the Middle East. West Texas Intermediate Crude oil futures for August added $0.84 at $81.74 a barrel.

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