Asian stock markets are primarily facing a downtrend on Friday after a sell-off on Wall Street, triggered by renewed uncertainties over the direction of interest rates. The potential for a June rate cut remains ambiguous as rising energy prices may sustain inflation, prompting the US Federal Reserve to delay lowering interest rates.
In his latest statement, Minneapolis Federal Reserve President, Neel Kashkari, asserts that if inflation consistently halts, rate cuts may not be necessary. The FedWatch Tool of CME Group predicts a 66.4% probability of the Fed decreasing rates by a quarter point in June, and a 32.2% chance rates will remain the same.
On Friday, the Australian stock market significantly retreated, following the negative cues from Wall Street, particularly in mining and technology stocks. The benchmark S&P/ASX 200 Index fell 72.90 points or 0.93%, hitting a low of 7,742.30; while the broader All Ordinaries Index decreased by 74.30 points or 0.92%.
Furthermore, banking, oil, and tech stocks also reflected a declining trend, while gold miners Evo Mining, Newmont, and Resolute Mining showed an upward trajectory.
In contrast, the total value of Australia's retail sales experienced a seasonally adjusted 0.3% month-on-month rise in February, reported by the Australian Bureau of Statistics (ABS). However, Australia posted a seasonally adjusted merchandise trade surplus of A$7.280 billion in February, falling short of forecasts for a surplus of A$10.500 billion.
The Japanese stock market is also sharply lower on Friday; primarily impacted by index heavyweights and technology stocks. The auto manufacturing and banking sectors also showed negative trends.
On the other hand, Mitsubishi Electric, Panasonic, Sony, and Canon slipped over 1%. Major losers such as Tokyo Electric Power, Socionext, Credit Saison, and Minebea Mitsumi all declined significantly. DeNA, Konica Minolta, Ebara, M3, Keyence, Yaskawa Electric, and Hoya also witnessed a declining trend.In contrast to the economic climate, there aren't any other significant areas making considerable gains.
Relevant economic data shows that the average spending per household in Japan declined by 0.5 percent annually in February, according to the Ministry of Internal Affairs and Communications. This figure surpassed anticipations of a 2.8 percent fall, especially following the sharp 6.3 percent drop in January. Household spending increased by 1.4 percent monthly, exceeding the expected 0.5 percent rise after the previous month's 2.1 percent fall. Household's average monthly income stood at 561,495 yen, a 2.5 percent annual decrease.
In currency market activities, the US dollar was observed trading in the lower 151 yen-range this Friday.
Asia's financial landscape showed New Zealand, Singapore, Hong Kong, and South Korea experienced decreases between 0.8 and 1.2 percent, while Indonesia saw a 0.3 percent rise. Malaysia's financial status remained relatively consistent. Taiwan and China's markets are currently closed due to the Ching Ming Festival.
In Wall Street news, stocks performed well for much of Thursday's trading day but experienced serious backlash towards the end. The major averages saw a steep decline in the final two hours, concluding the day with serious losses. The Nasdaq fell 228.38 points or 1.4 percent to 16,049.08, while the S&P 500 dropped 64.28 points or 1.2 percent to 5,147.21 and the Dow fell 530.16 points or 1.4 percent to 38,596.98, closing lower for the fourth consecutive session.
European markets, however, showed an upward trend. The UK's FTSE 100 index rose by 0.5 percent and the German DAX index increased by 0.2 percent, although the French CAC 40 index closed just under the break-even line.
Finally, crude oil prices continued their ascending pattern, furthering recent gains amidst worries about possible supply disruptions owing to geopolitical tensions. West Texas Intermediate Crude oil futures for May finished with a $1.16 or 1.4 percent increase at $86.59 a barrel, marking the fifth consecutive session of gains.
