Asian Markets Mostly Lower
Asian stock markets are mostly lower on Thursday after a fall in commodity prices overnight and as investors digested dismal economic data that reflected the impact of the coronavirus pandemic. Data showing that U.S. private sector employment nosedived last month and China’s service sector also continued to contract in April dampened investor sentiment.
The latest survey from Caixin showed that the services sector in China continued to contract in April, albeit at a slightly slower pace, with a Services PMI score of 44.4. That’s up from 43.0 in March, although it remains beneath the boom-or-bust line of 50 that separates expansion from contraction.
The Australian market is extending losses from the previous session following the mixed cues from Wall Street and the fall in commodity prices. Data showing that Australia’s services sector continued to struggle in April due to pandemic-related closures and restricted activity also dented sentiment.
The benchmark S&P/ASX 200 Index is declining 22.50 points or 0.42 percent to 5,384.60, after touching a low of 5,347.30 earlier. The broader All Ordinaries Index is down 13.30 points or 0.24 percent to 5,464.80. Australian stocks closed modestly lower on Wednesday.
Among the big four banks, National Australia Bank, ANZ Banking, Commonwealth Bank and Westpac are lower in a range of 1.3 percent to 1.9 percent.
In the oil sector, Oil Search is losing more than 2 percent, Santos is lower by almost 2 percent and Woodside Petroleum is declining more than 1 percent after crude oil prices dropped overnight.
In the mining space, Rio Tinto is down 0.4 percent and Fortescue Metals is lower by 0.3 percent, while BHP is advancing almost 1 percent.
Gold miners are mixed after gold prices extended losses overnight. Newcrest Mining is lower by almost 2 percent, while Evolution Mining is adding 0.4 percent.
NIB Holdings reported a 22 percent year-over-year decrease in health insurance sales in April, but said it hopes to recover some of its losses from fewer claims during the coronavirus pandemic. The health insurer’s shares are down more than 1 percent.
Caltex Australia said retail fuel volumes between January and April this year declined 16 percent compared to the year-ago period, reflecting the impact of the COVID-19 pandemic. The company will reduce workforce hours and lower contractor activity at its Lytton refinery in Brisbane. The refiner and fuel retailer’s shares are down more than 1 percent.
In economic news, the latest survey from the Australian Industry Group revealed that the services sector in Australia continued to contract in April, and at a steeper pace, with a Performance of Services Index score of 27.1. That’s down from 38.7 in March and it moves further beneath the boom-or-bust line of 50 that separates expansion from contraction.
The Australian Bureau of Statistics said that Australia posted a merchandise trade surplus of A$10.602 billion in March. That surpassed expectations for a surplus of A$6.8 billion and was up from the downwardly revised A$3.865 billion surplus in February.
Exports surged 15.0 percent on month to A$42.417 billion, while imports fell 4.0 percent on month to A$31.815 billion.
In the currency market, the Australian dollar is lower against the U.S. dollar on Thursday. The local unit was quoted at $0.6407, compared to $0.6445 on Wednesday.
The Japanese market, which resumed trading after a three-day holiday, is modestly lower following the lackluster cues from Wall Street after a report showed that U.S. private sector employment nosedived in the month of April. The safe-haven yen also strengthened, dragging exporters’ stocks lower.
The benchmark Nikkei 225 Index is down 45.22 points or 0.23 percent to 19,574.13, after falling to a low of 19,448.93 in early trades.
Market heavyweight SoftBank Group is losing almost 3 percent and Fast Retailing is lower by more than 1 percent.
The major exporters are lower on a stronger yen. Canon is losing more than 2 percent, Panasonic is lower by more than 1 percent and Sony is down 0.4 percent, while Mitsubishi Electric is adding 0.7 percent.
In the tech space, Tokyo Electron and Advantest are rising almost 3 percent each. Among automakers, Honda is lower by almost 2 percent and Toyota is down almost 1 percent.
In the oil sector, Inpex is adding 0.6 percent, while Japan Petroleum is declining 0.7 percent after crude oil prices dropped overnight.
Among the other major gainers, Dena Co. is rising almost 6 percent and Shimizu Corp. is higher by more than 3 percent. Screen Holdings, Taiyo Yuden and Shin-Etsu Chemical are advancing almost 3 percent each.
On the flip side, Keio Corp. is losing almost 5 percent, ANA Holdings is lower by more than 4 percent and Dai-ichi Life is declining almost 4 percent.
In the currency market, the U.S. dollar is trading in the lower 106 yen-range on Thursday.
Elsewhere in Asia, Shanghai, South Korea and Hong Kong are also lower, while New Zealand and Taiwan are modestly higher. The markets in Singapore, Indonesia and Malaysia are closed on Thursday in observance of Vesak Day.
On Wall Street, stocks showed a lack of direction before eventually ending mixed on Wednesday as traders weighed optimism about some states reopening against some dismal employment data. Private sector employment nosedived in the month of April, according to a report released by payroll processor ADP. The report said private sector employment plunged by 20.236 million jobs in April after slumping by a revised 149,000 jobs in May.
While the Nasdaq rose 45.27 points or 0.5 percent to 8,854.39, the Dow slumped 218.45 points or 0.9 percent to 23,664.64 and the S&P 500 fell 20.02 points or 0.7 percent to 2,848.42.
The major European markets closed mostly lower on Wednesday. The German DAX Index and the French CAC 40 Index slumped by 1.2 percent and 1.1 percent, respectively, while the U.K.’s FTSE 100 Index bucked the downtrend and inched up by 0.1 percent.
Crude oil futures fell on Wednesday after five successive days of gains, amid renewed concerns about excess supply in the market and worries about the outlook for near term energy demand. WTI crude for June delivery slumped $0.57 or about 2.3 percent to $23.99 a barrel.
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