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Asian Markets Trade Mostly Higher

Asian markets are trading mostly higher on Monday, despite the broadly negative cues from Wall Street on Friday, as traders react to mostly upbeat manufacturing sector data from several markets in the region as well as upbeat domestic business sentiment readings from Japan. Data showing slowdowns in the annual rates of US consumer price growth also led to optimism about the outlook for interest rates. Asian markets closed mostly higher on Friday.

The Australian stock market is currently trading notably lower on Monday, giving up the slight gains in the previous session, following the broadly negative cues from Wall Street on Friday. The benchmark S&P/ASX 200 index is falling to stay above the 7,700.00 level, with weakness across most sectors led by gold miners and technology stocks.

Traders reacted to data that showed the Australian manufacturing sector contracting the most since May 2020. They also cautiously look ahead to the latest monetary policy meeting minutes from the Reserve Bank of Australia later in the week.

The benchmark S&P/ASX 200 Index is losing 36.70 points or 0.47 percent to 7,730.80, after hitting a low of 7,710.30 earlier. The broader All Ordinaries Index is down 39.80 points or 0.50 percent to 7,974.00. Australian stocks closed slightly higher on Friday.

Among the major miners, Rio Tinto and Mineral Resources are gaining almost 1 percent each, while BHP Group and Fortescue Metals are edging up 0.3 to 0.4 percent each.

Oil stocks are weak. Beach energy and Woodside Energy are edging down 0.1 to 0.3 percent each, while Origin Energy is losing more than 1 percent and Santos is down almost 1 percent each.

Among tech stocks, Appen is gaining more than 1 percent and Afterpay owner Block is edging up 0.4 percent, while WiseTech Global is losing almost 3 percent and Xero is declining more than 1 percent. Zip is flat.

Gold miners are mostly lower. Newmont and Evolution Mining are losing almost 2 percent each, while Resolute Mining is declining 2.5 percent and Northern Star Resources is down more than 1 percent. Gold Road Resources is gaining almost 1 percent.

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

In economic news, the manufacturing sector in Australia continued to contract in June, and at a faster pace, the latest survey from Judo Bank revealed on Monday with a manufacturing PMI score of 47.2. That’s down from 49.7 in May, and it moves further beneath the boom-or-bust line of 50 that separates expansion from contraction. This indicated a fifth successive monthly deterioration in manufacturing sector conditions and at the fastest pace since May 2020.

In the currency market, the Aussie dollar is trading at $0.667 on Monday.

The Japanese stock market is trading modestly higher on Monday, adding to the gains in the previous session. The benchmark S&P/ASX 200 is moving up to near the 39,700 level, despite the broadly negative cues from Wall Street on Friday, as traders reacted to upbeat domestic business sentiment readings for the second quarter.

The benchmark Nikkei 225 Index closed the morning session at 39,687.40, up 104.32 or 0.26 percent, after touching a high of 39,942.69 earlier. Japanese shares ended notably higher on Friday.

Market heavyweight SoftBank Group is gaining more than 1 percent and Uniqlo operator Fast Retailing is edging up 0.4 percent. Among automakers, Honda is gaining more than 2 percent, while Toyota is declining almost 1 percent.

In the tech space, Screen Holdings is losing almost 1 percent and Advantest is edging down 0.2 percent, while Tokyo Electron is edging up 0.1 percent.

In the banking sector, Sumitomo Mitsui Financial and Mitsubishi UFJ Financial are edging up 0.1 to 0.4 percent each, while Mizuho Financial is gaining almost 1 percent.

The major exporters are higher. Canon and Mitsubishi Electric are gaining more than 1 percent each, while Sony is adding almost 1 percent and Panasonic is edging up 0.3 percent.

Among other major gainers, J. Front Retailing skyrocketing almost 13 percent and Takashimaya is soaring almost 8 percent, while Kawasaki Kisen Kaisha and Trend Micro are gaining more than 4 percent each. Amada is adding almost 4 percent, while Dai-ichi Life, Japan Steel Works, Isetan Mitsukoshi, OKUMA, T&D Holdings and Mitsubishi Corp. are advancing more than 3 percent each. Yokogawa Electric, Nippon Telegraph & Telephone, Mitsui O.S.K. Lines and MS&AD Insurance Group are up almost 3 percent each.

Conversely, Sumitomo Pharma is declining more than 3 percent, while LY Corp., Lasertec, Resonac Holdings, Chugai Pharmaceutical and Terumo are losing almost 3 percent each.

In economic news, large manufacturing in Japan strengthened in the second quarter of 2024, the Bank of Japan’s quarterly Tankan Survey of business sentiment showed on Monday with a diffusion index score of +13. That beat forecasts for a reading of +10 and was up from +11 three months ago. The outlook came in at +14, matching expectations and up from +13 in the previous quarter.

The large non-manufacturers index came in at +33, beating forecasts for +27 but down from +34. The outlook was +27, down from +44 three months earlier. The medium manufacturing index was at +8 with an outlook of +7, while the medium non-manufacturing index was at +22 with an outlook of +16. The small manufacturing index was at -1, while the small non-manufacturing index was at +12.

The latest survey from Jibun Bank revealed that the manufacturing sector in Japan was flat in June, with a manufacturing PMI score of 50.0. That’s down from 50.4 in May and it’s now right on the line that separates expansion from contraction.

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

Elsewhere in Asia, New Zealand, South Korea, Malaysia, Singapore, Taiwan and Indonesia are higher by between 0.1 and 0.6 percent each. China is bucking the trend and is down 0.1 percent. Hong Kong is closed for Special Administrative Region Establishment Day.

On Wall Street, stock moved mostly higher in early trading on Friday but showed a significant downturn over the course of the session. The major averages pulled back well off their early highs and into negative territory.

After reaching record intraday highs, the Nasdaq slid 126.08 points or 0.7 percent to 17,732.60 and the S&P 500 fell 22.39 points or 0.4 percent to 5,460.48. The narrower Dow posted a more modest loss, edging down 45.20 points or 0.1 percent to 39,118.86.

Meanwhile, the major European markets are turning in a mixed performance on the day. While the French CAC 40 Index is down by 0.5 percent, the U.K.’s FTSE 100 Index is up by 0.2 percent and the German DAX Index is up by 0.5 percent.

Crude oil prices showed a modest move to the downside on Friday, coming down from a two-month high on profit taking. West Texas Intermediate crude for August delivery dipped $0.20 or 0.2 percent to $81.54 a barrel.

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RTT Staff Writer
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