Asian Markets Mostly Lower On Coronavirus Concerns

Asian stock markets are mostly lower on Tuesday as optimism about coronavirus vaccines was offset by worries about the impact of new lockdown measures amid the surging coronavirus cases in the U.S. and other parts of the world.

While the coronavirus death toll in the U.S. reached 300,000, coronavirus cases are surging in Japan and South Korea. Meanwhile, Germany, London, the Netherlands and the Czech Republic are imposing stricter lockdowns.

The Australian market is declining following the mixed cues from Wall Street. Worries about rising Australia-China tensions also weighed on the market following reports that China has formally banned imports of Australian coal.

The benchmark S&P/ASX 200 Index is declining 24.00 points or 0.36 percent to 6,636.20, after falling to a low of 6,625.70 earlier. The broader All Ordinaries Index is down 32.40 points or 0.47 percent to 6,867.90. Australian stocks closed higher on Monday, rebounding after two straight days of losses.

Among the major coal producers, New Hope Corp. is tumbling almost 11 percent, Yancoal Australia is falling more than 10 percent and Whitehaven Coal is sliding 7 percent.

The major miners are also weak. Fortescue Metals is losing more than 3 percent, BHP Group is lower by more than 2 percent and and Rio Tinto is declining almost 1 percent.

The big four banks – Westpac, Commonwealth Bank, National Australia Bank and ANZ Banking – are lower in a range of 0.2 percent to 0.6 percent.

The Australian Prudential Regulation Authority or APRA said from January 1, it is removing a limit it imposed in July that required banks and insurance companies to retain at least half their earnings to ensure their stability amid the pandemic.

Gold miners declined after gold prices closed at a two-week low overnight. Evolution Mining is lower by 0.6 percent and Newcrest Mining is down 0.3 percent.

Oil stocks are also lower even as crude oil prices rose to a nine-month high on Friday. Oil Search is declining more than 2 percent, while Santos and Woodside Petroleum are down almost 2 percent each.

In economic news, members of the Reserve Bank of Australia’s Monetary Policy Board acknowledged that the global economic outlook remains mired in uncertainty due to the Covid-19 pandemic, minutes from the central bank’s December 1 meeting showed.

Australia’s economic activity continued to be below pre-pandemic levels, the board said, although it has often been better than expected. The board also said to make one of its top priorities a means of dealing with stubbornly high unemployment.

The Japanese market is lower following the mixed cues from Wall Street.

Japanese Prime Minister Yoshihide Suga’s announcement that the ‘Go To Travel’ domestic tourism campaign will be suspended nationwide from December 28 to January 11 also dampened sentiment. The announcement comes amid record-breaking coronavirus cases emerging in Japan almost daily since late October.

The benchmark Nikkei 225 Index is down 69.44 points or 0.26 percent to 26,663.00, after touching a low of 26,634.74 earlier. The Japanese market closed higher on Monday.

Market heavyweight SoftBank Group is lower by 0.3 percent and Fast Retailing is edging down 0.1 percent. In the tech space, Advantest is declining more than 1 percent and Tokyo Electron is down almost 1 percent.

The major exporters are mixed despite a weaker yen. Mitsubishi Electric is advancing almost 1 percent and Sony is adding 0.2 percent, while Canon and Panasonic are down 0.2 percent each.

Among automakers, Toyota is lower by 0.3 percent, while Honda is adding 0.2 percent. In the banking sector, Sumitomo Mitsui Financial and Mitsubishi UFJ Financial are declining 0.5 percent each.

The Nikkei reported that Toshiba Corp. and Fuji Electric will invest $1.9 billion to increase the output of power-saving chips used in electric vehicles. Shares of Toshiba are advancing more than 1 percent and Fuji Electric is rising 0.4 percent.

Among the other major gainers, Toho Co. is rising almost 4 percent, while Kawasaki Heavy Industries and Konica Minolta are higher by almost 3 percent each.

Conversely, ANA Holdings is losing almost 7 percent, while Sumco Corp. and Ricoh Co. are lower by almost 3 percent each.

In the currency market, the U.S. dollar is trading in the lower 104 yen-range on Tuesday.

Elsewhere in Asia, Shanghai, South Korea, Singapore, Hong Kong and Taiwan are also lower. New Zealand and Indonesia are little changed, while Malaysia is modestly higher.

On Wall Street, stocks showed a strong move to the upside in early trading on Monday, but gave back ground over the course of the session to close mixed once again. The vaccine news contributed to the initial strength on Wall Street along with continued optimism about a new fiscal stimulus bill, with a report from Reuters detailing efforts to pass a previously unveiled $908 billion bipartisan relief plan. The pullback came amid concerns about the impact of new lockdown measures as the coronavirus death toll in the U.S. reached 300,000.

While the Nasdaq rose 62.17 points or 0.5 percent to 12,440.04, the Dow slid 184.82 points or 0.6 percent to 29,861.55 and the S&P 500 fell 15.97 points or 0.4 percent to 3,647.49.

The major European markets also finished mixed on Monday. While the U.K.’s FTSE 100 Index dipped by 0.2 percent, the French CAC 40 Index climbed by 0.4 percent and the German DAX Index advanced by 0.8 percent.

Crude oil prices closed at a nine-month high on Monday amid hopes the rollout of a Covid-19 vaccine will help revive the economy and result in increased energy demand. WTI crude for January delivery climbed $0.42 or about 0.9 percent to $46.99 a barrel.

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