On Monday, Asian stock markets are predominantly trading lower, notwithstanding the generally optimistic cues from Wall Street the previous Friday. US job growth in January showed stronger than anticipated results, thereby reducing the likelihood of an interest rate cut in March. Mining and energy stocks took a hit as commodity prices dropped. However, most Asian markets had closed higher the previous Friday.
Despite positive signals from Wall Street, the Australian stock market is trading noticeably lower on Monday. The S&P/ASX 200 benchmark has dipped near the 7,600.00 level. The losses are led by mining and energy stocks in light of the falling commodity prices. Investors remain wary ahead of the Reserve Bank of Australia's impending monetary policy decision on Tuesday, with the expectation that interest rates will be kept steady.
The S&P/ASX 200 Index has dropped 75.10 points or 0.98 percent to 7,624.30. The broader All Ordinaries Index has also decreased by 77.50 points or 0.98 percent to 7,854.10. On Friday, Australian stocks had closed significantly higher.
Major miners such as Rio Tinto, BHP Group, and Fortescue Metals have all suffered losses of more than 2 percent each, with Mineral Resources plummeting more than 4 percent. Oil stocks are also mostly in the red.
Shares in Silver Lake Resources fell by nearly 14 percent at the news of its merger with Red 5. This development comes amidst other economic news that, according to a survey from Judo Bank, Australia's services sector contracted in January at a slower rate than before but still fell short of the threshold between expansion and contraction.
Additionally, the Australian Bureau of Statistics reported a merchandise trade surplus of A$10.959 billion in December, surpassing the projected surplus.
However, in contrast to Australia, the Japanese stock market saw a significant increase on Monday, with the S&P/ASX 200 benchmark far above the 36,300 level. The gain is attributed to positive cues from Wall Street on Friday, aided by advances in index heavyweights and financial stocks, despite a slump in tech stocks.
In the banking sector, stocks of Sumitomo Mitsui Financial, Mitsubishi UFJ Financial, and Mizuho Financial grew by more than 1 percent, over 2 percent, and close to 3 percent, respectively. The export industry also observed gains, with Canon and Mitsubishi Electric advancing by more than 1 percent while Panasonic surged by 6.5 percent.Among the major companies experiencing significant growth are Isetan Mitsukoshi Holdings, with a near 10 percent increase, and Seiko Epson, enjoying a surge of over 7 percent. In addition, JTEKT, Pacific Metals, and NEXON have witnessed a raise of about 7 percent each. Other notable gains include Fujitsu with an increase of over 6 percent and J. Front Retailing which has added nearly 5 percent. Companies such as M3, CyberAgent and Denso also saw an increase of over 4 percent, while Mazda Motor, Chiba Bank, NTN and Kyocera all experienced a growth of nearly 4 percent each.
On the other hand, Sumitomo Chemical has seen a drastic drop of over 10 percent. Minebea Mitsumi is reporting a loss of nearly 6 percent, while Toyota Tsusho and KDDI have declined by nearly 4 percent and 3 percent respectively.
In terms of economic developments, the Japanese service sector continued its expansion in January, accelerating pace as confirmed by a recent survey from Jibun Bank. A service PMI score of 53.1, up from 51.5 in December, suggests a further climb above the decisive 50 mark indicating economic growth.
As for the currency market, the U.S. dollar is selling at a mid-148 yen-range currently.
In other Asian economies, China, Singapore and South Korea report lower values between 1.5 and 2.0 percent each. New Zealand, Hong Kong, and Taiwan are experiencing a slight decrease between 0.1 and 0.4 percent each, while Malaysia and Indonesia's markets are fairly steady.
In the U.S., The Wall Street experienced a sharp rise on Friday, continuing the recuperative rally observed during Thursday's trading session. The Dow and S&P 500 even achieved new record closing highs.
Across Europe, the markets experienced mixed results. The U.K.'s FTSE 100 Index dropped by 0.1 percent, while France's CAC 40 Index and Germany's DAX Index increased by 0.1 percent and 0.4 percent respectively.
Crude oil prices experienced a major drop on Friday, owing to fading expectations of an early rate cut by the Federal Reserve after the unveiling of a greater than expected increase in U.S. non-farm payroll employment for January. The sharp hike in the dollar post the jobs data announcement also exerted pressure on oil prices. West Texas Intermediate Crude oil futures for March closed down at approximately 2.1 percent or $1.54 at $72.28 per barrel, culminating in a weekly drop of over 7 percent.
