Asian stock exchanges largely experienced declines on Wednesday, mirroring the negative performance from Wall Street overnight. The downturn is attributed to traders capitalizing on recent market gains to secure profits, coupled with increasing geopolitical concerns in the Middle East and China's military activities near Taiwan, which are impacting investor confidence. Notably, most Asian markets had closed higher on Tuesday.
Regarding monetary policy, expectations for a 50-basis-point rate cut by the U.S. Federal Reserve next month have diminished. However, there remains cautious optimism for a 25-basis-point reduction. The CME Group's FedWatch Tool currently shows a 92.2% probability of a quarter-point rate cut at the Fed's November meeting.
In Australia, the stock market slightly pulled back on Wednesday, retracting some of the gains from the prior two sessions. The S&P/ASX 200 fell below the 8,300 mark, primarily due to losses in sectors such as iron ore mining, energy, and technology, which were nearly balanced by gains in gold mining and financial stocks. The S&P/ASX 200 Index decreased by 9.40 points or 0.11 percent to 8,309.00, having earlier reached a low of 8,274.30. Meanwhile, the broader All Ordinaries Index dropped 17.00 points or 0.20 percent to 8,581.60. Australian equities had closed significantly higher on Tuesday.
Among the major miners, BHP Group and Rio Tinto saw declines of nearly 2% each, with Mineral Resources dropping over 3%. Fortescue Metals remained unchanged. In the energy sector, Origin Energy and Beach Energy each lost over 1%, and Santos fell more than 2%, while Woodside Energy rose by almost 1%. In the tech sector, WiseTech Global slipped around 2%, Appen fell nearly 5%, and both Zip and Xero declined by more than 1%. Block, which owns Afterpay, edged up 0.1%.
The big four banks showed mixed results, with Commonwealth Bank, National Australia Bank, and Westpac each increasing by almost 1%, while ANZ Banking edged up by 0.5%. In the gold mining sector, Northern Star Resources and Gold Road Resources each rose by more than 1%, Evolution Mining advanced nearly 5%, Newmont increased by over 3%, and Resolute Mining added 1.5%.
In currency trading, the Australian dollar was at $0.668 on Wednesday.
In Japan, the stock market saw a significant decline, breaking a four-day winning streak, influenced by Wall Street’s negative trends. The Nikkei 225 fell over 2% to below the 39,100 level, with broad losses led by major companies and technology stocks.
The benchmark Nikkei 225 Index concluded the morning session at 39,093.46, down 817.09 points or 2.05 percent, after reaching a low of 39,062.85. Japanese stocks had also ended notably higher on Tuesday.
Market heavyweight SoftBank Group dropped more than 4%, while Fast Retailing, operator of Uniqlo, edged down 0.2%. In automotive, Honda remained steady, and Toyota slipped 0.4%.
In the tech sector, Advantest decreased by nearly 2%, Tokyo Electron plummeted over 10%, and Screen Holdings fell almost 10%.
In banking, Sumitomo Mitsui Financial slightly declined by 0.1%, whereas Mizuho Financial and Mitsubishi UFJ Financial showed marginal gains of 0.1% to 0.5% each.
Major exporters like Panasonic and Canon edged down by 0.3% to 0.4%, Sony declined nearly 1%, and Mitsubishi Electric lost over 1%.
Among significant decliners were Lasertec, plummeting almost 14%, Disco falling more than 8%, and Isetan Mitsukoshi sliding over 6%. Socionext and Hoya fell more than 5% each. Shiseido decreased nearly 5%, while both Keyence and Ebara lost almost 4% each. Renesas Electronics, Yaskawa Electric, Fuji Electric, and J. Front Retailing were down more than 3% each.
Conversely, Taisei surged over 5%, and Obayashi gained more than 5%.
From an economic perspective, new data showed Japanese core machine orders experienced a seasonally adjusted decrease of 1.9% in August, as reported by the Cabinet Office on Wednesday. This decline brought the total to 858.1 billion yen, missing forecasts of a 0.1% decline, consistent with July's figures. On an annual basis, core machine orders fell by 3.4%, which was significantly below the anticipated 3.6% growth and marked a sharp fall from the previous month's 8.7% rise. For the third quarter of 2024, core machine orders are expected to increase by 0.2% quarter-on-quarter and 3.9% year-on-year, reaching 2,626.7 billion yen.In August, the total value of machinery orders received by 280 manufacturers in Japan experienced a monthly decline of 3.0 percent, although it rose by 15.5 percent compared to the previous year, reaching 2,961.4 billion yen.
In currency markets, the U.S. dollar is trading within the lower 149 yen range as of Wednesday.
In other parts of Asia, stock markets presented mixed results. Both New Zealand and Taiwan saw declines of 1.1 percent, whereas Hong Kong, South Korea, and Malaysia experienced increases ranging from 0.1 to 0.6 percent. Conversely, China, Singapore, and Indonesia saw decreases between 0.1 and 0.3 percent.
On Wall Street, after an initial upward movement early on Tuesday, stocks faced considerable selling pressure as the day progressed. Major indexes notably retreated, following robust gains seen in Monday's trading session. The Nasdaq, characterized by its tech focus, dropped by 187.10 points, or 1.0 percent, to reach 18,315.59. Meanwhile, the Dow Jones Industrial Average slid 324.80 points, or 0.8 percent, closing at 42,740.42, and the S&P 500 decreased by 44.59 points, or 0.8 percent, to finish at 5,815.26.
European markets also saw a downward trend on the same day. The French CAC 40 Index dropped 1.1 percent, while the UK's FTSE 100 Index decreased by 0.5 percent, and Germany's DAX Index slightly declined by 0.1 percent.
In commodities, crude oil prices saw a significant drop on Tuesday amid reports that alleviated concerns over potential supply disruptions, suggesting that Israel would refrain from targeting Iran’s oil infrastructure. West Texas Intermediate crude oil futures for November delivery fell by $3.25, or 4.4 percent, settling at $70.58 per barrel.
