Asian stock markets mostly declined on Wednesday, following mixed signals from Wall Street overnight, amidst ongoing uncertainty regarding interest rate prospects ahead of crucial inflation data releases from the U.S. and Europe later this week. Asian markets had already closed mostly lower on Tuesday.
The report on U.S. personal income and spending for April, scheduled for release on Friday, includes inflation readings favored by the Federal Reserve. This data could be pivotal for interest rate projections as the Fed's next policy meeting approaches on June 11-12.
Meanwhile, Minneapolis Fed President Neel Kashkari indicated that more progress on inflation is necessary to justify a rate cut. In an interview with CNBC, Kashkari mentioned that he needs to see "many more months of positive inflation data" before considering a reduction in interest rates.
Australian shares traded significantly lower on Wednesday, extending losses from the previous six sessions. The benchmark S&P/ASX 200 fell below the 7,700 level, driven by declines in the mining and financial sectors, reflecting the mixed cues from Wall Street. Additionally, data showed Australia's monthly inflation rate accelerating to 3.6% in April, the highest since November last year.
The S&P/ASX 200 Index dropped 88.30 points, or 1.14 percent, to 7,678.40, after hitting a low of 7,676.10 earlier. The broader All Ordinaries Index decreased by 86.80 points, or 1.08 percent, to 7,948.10. Australian stocks had ended modestly lower on Tuesday.
In the mining sector, Rio Tinto lost over 1 percent, Fortescue Metals declined almost 2 percent, while BHP Group edged up 0.1 percent, and Mineral Resources remained flat. The oil sector showed mixed results, with Woodside Energy edging up 0.1 percent, Beach Energy gaining almost 2 percent, and Origin Energy and Santos edging down by 0.1 to 0.2 percent each.
In the tech space, Afterpay owner Block and WiseTech Global fell nearly 1 percent, while Xero edged down 0.3 percent. Zip edged up 0.2 percent, and Appen gained almost 1 percent.
Among the major banks, Commonwealth Bank, Westpac, National Australia Bank, and ANZ Banking each lost more than 1 percent. In the gold mining sector, Newmont edged up 0.4 percent, Resolute Mining advanced over 4 percent, while Evolution Mining, Northern Star Resources, and Gold Road Resources edged down by 0.2 to 0.5 percent each.
Elsewhere, shares in respirator company Fisher & Paykel surged 6 percent on optimism regarding the 2025 net profit outlook, despite being impacted by three "abnormal items" in 2024.
In economic news, the Australian Bureau of Statistics reported a seasonally adjusted 2.9 percent decline in the value of total construction work done in Australia for the first quarter of 2024, to A$64.032 billion, missing forecasts for a 0.6 percent increase after a 0.7 percent gain in the prior quarter. Annually, overall construction work rose by 1.8 percent.
In the currency market, the Aussie dollar traded at $0.665 on Wednesday.
The Japanese stock market also traded modestly lower on Wednesday after opening in positive territory, extending slight losses from the previous session, with weakness in some index heavyweights amid a spike in global bond yields. The Nikkei 225 fell slightly below the 38,800 level.
The benchmark Nikkei 225 Index closed the morning session at 38,789.52, down 65.85 points or 0.17 percent, after hitting a low of 38,675.11 earlier. Japanese stocks had ended slightly lower on Tuesday.
Market heavyweight SoftBank Group gained over 3 percent, while Uniqlo operator Fast Retailing declined almost 1 percent. In the automotive sector, Honda edged up 0.2 percent, and Toyota lost nearly 1 percent.
In the tech sector, Advantest gained almost 3 percent, Screen Holdings added nearly 2 percent, while Tokyo Electron edged down 0.2 percent.
In the banking sector, Mizuho Financial edged down 0.1 percent, while Mitsubishi UFJ Financial gained over 1 percent, and Sumitomo Mitsui Financial added almost 1 percent.
Among major exporters, Sony and Mitsubishi Electric edged up 0.1 to 0.4 percent each, while Panasonic declined almost 1 percent, and Canon edged down 0.2 percent.
Among other major losers, Tokyo Electric Power declined nearly 5 percent, Mitsubishi Heavy Industries lost almost 4 percent, while Teijin and LY slipped over 3 percent each.
Conversely, Sompo Holdings gained over 4 percent, and both Hoya and Konami Group added almost 3 percent each.
In the currency market, the U.S. dollar traded in the lower 157 yen-range on Wednesday.In Asian markets, Hong Kong and South Korea fell by 1.3% and 1.0%, respectively. Malaysia, Taiwan, and Indonesia also saw declines between 0.3% and 0.5% each. Conversely, China and New Zealand recorded gains of 0.5% and 0.1%, respectively, while Singapore remained relatively flat.
On Wall Street, the Nasdaq and the Dow experienced a mixed trading session on Tuesday. Despite initially moving in opposite directions, the Nasdaq briefly dipped into negative territory in the afternoon but later rebounded to close at a new record high.
The major averages concluded the day with mixed results. The Nasdaq rose by 99.09 points or 0.6% to 17,019.88, building on last Friday's strong performance. The S&P 500 edged up by 1.32 points or less than 0.1% to 5,306.04. In contrast, the Dow dropped by 216.73 points or 0.6% to 38,852.86, continuing its sharp pullback from last week.
In Europe, the major markets also trended downward. The German DAX Index decreased by 0.5%, while the U.K.'s FTSE 100 Index and the French CAC 40 Index fell by 0.8% and 0.9%, respectively.
Crude oil prices rose on Tuesday, driven by optimism that demand for oil will increase during the U.S. driving season and expectations that OPEC will extend its production cuts into the next quarter. West Texas Intermediate (WTI) crude oil futures for July settled higher by $2.11 or 2.7%, at $79.83 per barrel.
