RTTNews.com – May 18, 2016 – Asian stock markets are mostly in negative territory on Wednesday after upbeat U.S. economic reports led to renewed speculation that the U.S. Federal Reserve could raise interest rates next month. Meanwhile, the Japanese market is higher after data showed that the country’s economy grew more than expected in the first quarter.
The Australian market opened lower following the negative cues overnight from Wall Street. Banks and oil stocks are weak, while mining stocks are mostly higher.
In late-morning trades, the benchmark S&P/ASX 200 Index is declining 39.40 points or 0.73 percent to 5,356.50, off a low of 5,347.10 earlier. The broader All Ordinaries Index is down 38.30 points or 0.70 percent to 5,420.20.
In the mining sector, BHP Billiton is adding almost 1 percent and Fortescue Metals is up 0.2 percent after iron ore prices jumped overnight, while Rio Tinto is declining almost 1 percent.
Gold miner Newcrest Mining is advancing 0.7 percent and Evolution Mining is higher by 0.5 percent after gold prices rose overnight.
In the oil space, Oil Search is declining 0.3 percent, Santos is down 0.6 percent and Woodside Petroleum is losing more than 1 percent despite the overnight rally in crude oil prices.
Freedom Foods said it has expanded its partnership with Chinese distributor Pinlive to increase the range of Pinlive branded food products sourced directly from Australia. Shares of the cereal and snacks maker are rising more than 5 percent.
Asciano said it has been forced to extend the deadline for its A$9.05 billion takeover by a consortium of infrastructure investors due to delay in receiving FIRB approval. The rail and ports operator’s shares are lower by 0.3 percent.
IOOF Holdings said it expects full-year profit to be flat as second-half revenues were impacted by equity market devaluations. Shares of the financial services provider are losing 4 percent.
In economic news, Australia will see April results for the Westpac leading index as well as first-quarter data for wage costs today.
In the currency market, the Australian dollar has fallen on Wednesday against the U.S. dollar, which surged on increased expectations of a U.S. rate hike. In early trades, the Australian dollar was trading at US$0.7325, down from US$0.7351 on Tuesday.
The Japanese market is higher in choppy trade after the country’s first-quarter gross domestic product or GDP data topped analysts’ estimates. However, the upbeat data dampened expectations for further easing measures from the Bank of Japan.
In late-morning trades, the benchmark Nikkei 225 Index is adding 101.57 points or 0.61 percent to 16,754.37, after rising to a high of 16,774.89 and falling to a low of 16,517.52 earlier.
Exporters are mostly higher despite a stronger yen. Sony and Panasonic are advancing more than 1 percent each, while Canon and Toshiba are adding almost 1 percent each. Sharp is rising more than 4 percent. Market heavyweight Fast
Retailing is down 0.2 percent.
Among the major automakers, Toyota is adding 0.5 percent, while Honda is down 0.5 percent.
Mitsubishi Motors’ shares are gaining almost 2 percent after the Nikkei business daily reported that the company’s President Tetsuro Aikawa
has decided to step down over the fuel economy data scandal that surfaced in April.
Shares of Apple’s suppliers Alps Electric and Taiyo Yuden are gaining more than 5 percent and 2 percent respectively.
In the banking space, Mitsubishi UFJ Financial is advancing more than 5 percent. In the oil sector, Inpex is gaining more than 7 percent and JX Holdings is rising almost 2 percent.
Among the other major gainers, Japan Steel Works is rising more than 6 percent, while Marui Group is losing almost 3 percent.
On the economic front, the Cabinet Office said that Japan’s gross domestic product or GDP jumped 0.4 percent on quarter in the first quarter of 2016. That topped forecasts for an increase of 0.1 percent, following the downwardly revised 0.4 percent contraction in the previous three months.
On a yearly basis, GDP surged 1.7 percent – blowing away forecasts for a gain of 0.3 percent, following the downwardly revised 1.1 percent contraction in the three months prior.
Japan will also see April figures for Tokyo condominium sales today.
In the currency market, the U.S. dollar traded just above the 109 yen-level on Wednesday, down from Tuesday’s close in the mid 109 yen level in Tokyo.
Elsewhere in Asia, Shanghai and Hong Kong are down more than 1 percent each. South Korea, New Zealand, Indonesia, Malaysia and Taiwan are also in negative territory, while Singapore is edging higher.
On Wall Street, stocks closed sharply lower on Tuesday as traders cashed in on the previous session’s gains after upbeat economic reports on consumer prices, residential construction and industrial production led to renewed speculation that the Federal Reserve could raise interest rates next month.
The Dow slumped 180.73 points or 1 percent to 17,529.98, the Nasdaq plunged 59.73 points or 1.3 percent to 4,715.73 and the S&P 500 tumbled 19.45 points or 0.9 percent to 2,047.21.
The major European markets turned in another mixed performance on Tuesday. While the U.K.’s FTSE 100 Index rose by 0.3 percent, the French CAC 40 Index fell by 0.3 percent and the German DAX Index slid by 0.6 percent.
Crude oil futures rallied yet again Tuesday on speculation the global supply glut will soon evaporate. June WTI crude rose 59 cents, or 1.2 percent, to settle at $48.31 a barrel on the New York Mercantile Exchange – the highest settlement since October 2015.