Asian Markets Mostly Lower Amid Virus Concerns

Asian stock markets are trading mostly lower on Tuesday, with most markets also extending the losses of the previous session, following the broadly negative cues from Wall Street overnight, as signs of growing inflationary pressures and the surge in spread of the delta variant of coronavirus in many countries raised concerns that the pace of global economic recovery might slowdown significantly. Asian stocks ended mostly lower 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 below the 7,300 level, following the broadly negative cues from Wall Street overnight, with materials, energy and financial stocks dragging the market. Traders remain concerned about the spread of the highly contagious coronavirus variants in more states.

Victoria has recorded 13 new local cases of coronavirus, with the total active cases reaching 96 and the fifth lockdown extended for a further seven days. New South Wales reported 78 new local cases and South Australia starts a one-week lockdown after reporting five cases, schools, retail, and construction will pause.

The benchmark S&P/ASX 200 Index is losing 15.90 points or 0.22 percent to 7,270.10, after hitting a low of 7,205.00 earlier. The broader All Ordinaries Index is down 15.00 points or 0.20 percent to 7,544.70. Australian stocks closed notably lower on Monday.

Among the major miners, BHP Group and Rio Tinto are losing more than 2 percent each, while Fortescue Metals is down more than 1 percent. Mineral Resources and OZ Minerals are declining almost 2 percent each.

BHP Group reported that its fourth-quarter total iron ore production declined 2.2 percent to 65.25 million tonnes from last year.

Oil stocks are lower after crude oil prices tumbled overnight. Santos and Beach energy are losing more than 3 percent each, while Origin Energy is down more than 1 percent. Woodside Petroleum is declining more than 2 percent.

However, oil Search is up almost 3 percent after confirming that it had received an $8.8 billion non-binding all-stock acquisition offer from Santos and has rejected it.

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

Among tech stocks, Afterpay and WiseTech Global are gaining more than 1 percent each, while Xero is adding almost 2 percent. Appen is losing more than 1 percent. BNPL firm Afterpay is piloting a new banking app called Money, for a launch in October after joining with Westpac last year to offer bank accounts.

Gold miners are mostly lower. Newcrest Mining and Resolute Mining are losing almost 1 percent each, while Northern Star Resources is down more than 1 percent. Evolution Mining is declining almost 2 percent, while Gold Road Resources is edging up 0.5 percent.

In economic news, the Reserve Bank of Australia will on Tuesday release the minutes from its July 6 meeting. At the meeting, the bank decided to leave its cash rate unchanged at a record low of 0.10 percent, as widely expected. It also scaled back its quantitative easing program citing stronger-than-expected economic recovery and suggested that interest rates will remain at the current level until 2024.

In the currency market, the Aussie dollar is trading at $0.734 on Tuesday.

The Japanese stock market is modestly lower after dipping sharply in early deals on Tuesday, extending the losses of the previous four sessions, with the benchmark Nikkei index falling below the 27,600 level, following the broadly negative cues from Wall Street overnight, as a surge in the coronavirus’s delta variant infections sparked a broad sell-off and renewed virus fears gripped markets ahead of the Tokyo Olympics.

The market clawed back after an early drop following local data that showed Japan’s consumer prices rose by 0.2 percent year-over-year in June, the first increase since August 2020.

The benchmark Nikkei 225 Index closed the morning session at 27,564.52, down 88.22 points or 0.32 percent, after hitting a low of 27,330.15 earlier. Japanese shares closed sharply lower on Monday.

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

In the tech space, Advantest and Screen Holdings are gaining 0.5 percent each, while Tokyo Electron is adding almost 1 percent. In the banking sector, Mitsubishi UFJ Financial is losing almost 2 percent, while Sumitomo Mitsui Financial and Mizuho Financial are down more than 1 percent each.

The major exporters are mostly lower, with Sony and Panasonic losing almost 2 percent, while Mitsubishi Electric is edging down 0.3 percent. Canon is soaring more than 8 percent.

Among the other major losers, Inpex is losing almost 4 percent, while Dentsu Group, Isuzu Motors, CyberAgent and Mitsubishi Chemical Holdings are down almost 3 percent each. Sumitomo Chemical, Hino Motors, Mitsui Fudosan, GS Yuasa, Toho Zinc, Fanuc, Fujikura, East Japan Railway, Tokyo Tatemono and Sumitomo Metal Mining are all down more than 2 percent each.

Conversely, Seiko Epson is gaining more than 5 percent, Nikon is adding more than 3 percent, Ricoh is up almost 3 percent and Nichirei is rising almost 2 percent.

In economic news, overall consumer prices in Japan were up 0.2 percent on year in June, the Ministry of Internal Affairs and Communications said on Tuesday. That was in line with expectations following the 0.1 percent decline in May. Core consumer prices, which exclude volatile food prices, also gained an annual 0.2 percent. That too matched estimates following the 0.1 percent increase in the previous month. On a seasonally adjusted monthly basis, overall inflation was up 0.3 percent and core consumer prices rose 0.1 percent.

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

Elsewhere in Asia, Taiwan is losing 0.9 percent, while New Zealand, China, South Korea, and Hong Kong are lower by between 0.1 and 0.7 percent each. Markets in Malaysia, Singapore and Indonesia are closed on account of Eid-ul-Adha.

On Wall Street, stocks moved sharply lower during trading on Monday, extending the pullback seen over the course of last Friday’s session. With the steep drop on the day, the major averages ended the session at their lowest closing levels in almost a month.

The major averages regained some ground going into the close but remained firmly negative. The Dow plunged 725.81 points or 2.1 percent to 33,962.04, the Nasdaq slumped 152.25 points or 1.1 percent to 14,274.98 and the S&P 500 tumbled 68.67 points or 1.6 percent to 4,258.49.

The major European markets also showed significant moves to the downside. While the U.K.’s FTSE 100 Index plunged 2.3 percent, the French CAC 40 Index and the German DAX Index plummeted 2.5 percent and 2.6 percent, respectively.

Crude oil prices fell sharply on Monday, weighed down by concerns about oversupply in the market after OPEC+ agreed to boost output. West Texas Intermediate Crude oil futures for September sank $5.21 or 7.3 percent at $66.35 a barrel.

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