Asian Markets Mostly Lower Amid Cautious Trades

(RTTNews) - Asian stock markets are trading mostly lower on Friday, following the broadly negative cues from global markets overnight, with traders remaining largely cautious as aggressive interest rate hikes by global central banks will push the economy into a recession. Asian markets ended mostly lower on Thursday.

While the US Fed raised interest rates by 50 basis points as widely expected, the accompanying statement and the central bank's latest projections led to worries about where rates will peak.

In the summary of economic projections released by the Fed, the peak federal funds rate is pegged at 5.1% versus 4.6% projected in September 2022 and 3.8% projected in June 2022.

The Fed, the Bank of England, the European Central Bank, and the Swiss National Bank, have all raised their interest rates, and most of these central banks have indicated further tightening in the coming months to rein in inflation.

The Australian stock market is notably lower on Friday, extending the losses in the previous session, with the benchmark S&P/ASX 200 falling below the 7,200 level, following the broadly negative cues from global markets overnight, with weakness across most sectors, led by technology, financial and gold miner stocks, as rising concerns about global economic growth due to surging interest rates dented sentiment.

The benchmark S&P/ASX 200 Index is losing 28.90 points or 0.40 percent to 7,175.90, after hitting a low of 7,117.60 earlier. The broader All Ordinaries Index is down 26.50 points or 0.36 percent to 7,363.80. Australian markets ended significantly lower on Thursday.

Among major miners, BHP Group and Fortescue Metals are gaining almost 1 percent each, while Rio Tinto is adding almost 2 percent, Mineral Resources is edging up 0.4 percent and OZ Minerals is edging down 0.3 percent.

Oil stocks are weak. Santos is edging down 0.4 percent, Beach energy is losing almost 1 percent and Origin Energy is declining more than 1 percent, while Woodside Energy is edging up 0.1 percent.

Among tech stocks, Afterpay owner Block and Appen are slipping almost 5 percent each, while Zip is down almost 2 percent, Xero is declining more than 2 percent and WiseTech Global is losing almost 1 percent.

Among the big four banks, National Australia Bank, Commonwealth Bank and ANZ Banking are losing more than 1 percent each, while Westpac is declining almost 1 percent. Gold miners are lower. Northern Star Resources, Gold Road Resources, Evolution Mining and Newcrest Mining are all losing more than 2 percent each, while Resolute Mining is adding almost 3 percent.

In economic news, the manufacturing sector in Australia continued to expand in December, albeit at a slower pace, the latest survey from S&P Global revealed on Friday with a manufacturing PMI score of 50.4. That's down from 51.3 in November, although it remains above the boom-or-bust line of 50 that separates expansion from contraction. The survey also showed that the services PMI fell to 46.9 from 47.6 and the composite PMI sank to 47.3 from 48.0.

In the currency market, the Aussie dollar is trading at $0.672 on Friday. The Japanese stock market is sharply lower on Friday, extending the losses in the previous session, with the benchmark Nikkei 225 falling to stay a tad above the 27,600 level, following the broadly negative cues from global markets overnight, with weakness across all sectors, led by technology stocks, as rising concerns about global economic growth due to surging interest rates dented sentiment. The benchmark Nikkei 225 Index closed the morning session at 27,620.66, down 431.04 points or 1.54 percent, after hitting a low of 27,582.37. Japanese stocks closed modestly lower on Thursday.

Market heavyweight SoftBank Group is losing almost 4 percent and Uniqlo operator Fast Retailing is declining more than 2 percent. Among automakers, Honda is edging down 0.4 percent and Toyota is declining more than 1 percent.

In the tech space, Advantest is declining more than 3 percent, Screen Holdings is losing almost 1 percent and Tokyo Electron is slipping almost 4 percent.

In the banking sector, Mizuho Financial is edging up 0.5 percent, Mitsubishi UFJ Financial is gaining almost 1 percent and Sumitomo Mitsui Financial is adding more than 1 percent.

Among major exporters, Canon is edging down 0.4 percent, while Sony and Mitsubishi Electric are declining more than 1 percent each. Panasonic is flat. Among the other major losers, CyberAgent and Yaskawa Electric are losing more than 3 percent each, while M3, Z Holdings, NTN and Credit Saison are declining almost 3 percent each.

Conversely, there are no other major gainers.

In economic news, the manufacturing sector in Japan continued to contract in December, and at a faster pace, the latest survey from Jibun Bank revealed on Friday with a manufacturing PMI score of 48.8. That's down from 49.0 in November and it moves further beneath the boom-or-bust line of 50 that separates expansion from contraction. The survey also showed that the services PMI rose to 51.7 from 50.3 and the composite index climbed to 50.0 from 48.9.

In the currency market, the U.S. dollar is trading in the lower 137 yen-range on Friday.

Elsewhere in Asia, Taiwan is down 1.2 percent, while New Zealand, Singapore, South Korea and Indonesia are lower by between 0.2 and 0.5 percent each. Hong Kong is bucking the trend and is up 1.0 percent. China and Malaysia are relatively flat.

On Wall Street, stocks moved sharply lower during trading on Thursday, extending the pullback seen over the course of the previous session. With the sell-off on the day, the major averages slumped to their lowest closing levels in over a month.

The major averages climbed off their lows of the session in late-day trading but remained firmly negative. The Dow tumbled 764.13 points or 2.3 percent to 33,202.22, the Nasdaq plunged 360.36 points or 3.2 percent to 10,810.53 and the S&P 500 dove 99.57 points or 2.5 percent to 3,895.75.

The major European markets also moved to the downside on the day. While the U.K.'s FTSE 100 Index slid by 0.9 percent, the French CAC 40 Index and the German DAX Index plunged by 3.1 percent and 3.3 percent, respectively.

Crude oil futures settled lower on Thursday as concerns about easing supply following a partial restart of the Keystone Pipeline. The dollar's rise on hawkish comments by the Federal Reserve weighed as well on oil prices. West Texas Intermediate Crude oil futures for January ended lower by $1.17 or 1.5 percent at $76.11 a barrel.