Asian stock markets are largely trending downward on Tuesday, influenced by mixed signals from Wall Street overnight, primarily spurred by rising bond yields and tempered expectations for US Federal Reserve rate cuts. Investors are also securing profits following a recent rally. Market sentiment is further marred by ongoing geopolitical tensions in the Middle East and Europe, alongside concerns surrounding the U.S. presidential election. Notably, Asian markets displayed mixed outcomes on Monday.
Following the Federal Reserve's decision to lower interest rates by 50 basis points last month, the CME Group's FedWatch Tool now indicates an 87% probability of a mere 25 basis point rate cut next month. In support of gradual rate reductions, Dallas Fed President Lorie Logan emphasized their necessity for risk management and achieving economic objectives.
Reversing prior gains, the Australian stock market is seeing a sharp decline on Tuesday, in line with the mixed cues from Wall Street. The S&P/ASX 200 is experiencing significant drops below the 8,300 level, with most sectors, especially energy and technology, showing weakness. In contrast, gold mining stocks are offering a rare glimmer of hope. The S&P/ASX 200 Index is down by 114.00 points or 1.37%, settling at 8,230.40 after hitting a low of 8,215.10. Meanwhile, the wider All Ordinaries Index has fallen 109.20 points or 1.27% to 8,494.90. This comes after Australian stocks saw noteworthy gains on Monday.
Major mining players such as BHP Group and Mineral Resources have fallen nearly 1% and 5%, respectively, with Rio Tinto and Fortescue Metals each experiencing over 1% declines.
In the oil sector, shares are mostly down. Origin Energy has dipped almost 2%, while Woodside Energy and Santos are each down about 1%. Conversely, Beach Energy is slightly on the rise, up by 0.4%.
In technology, companies like Zip have fallen by more than 2%, WiseTech Global nearly 3%, Afterpay's parent Block is down 0.5%, Xero has dropped over 1%, and Appen is down almost 2%.
Gold mining stocks are largely on the upswing. Gold Road Resources and Resolute Mining have seen gains of nearly 1% each, with Newmont and Northern Star Resources rising between 0.2% and 0.3%. However, Evolution Mining has declined nearly 1%.
Australia's major banks are experiencing losses, with Commonwealth Bank, Westpac, and National Australia Bank each down by more than 1%, while ANZ Banking has dropped nearly 1%.
In additional news, shares of Audinate Group plummeted over 9% after the software company failed to reach its full-year gross profit target, citing ongoing "headwinds" expected to persist into the second quarter.
In currency markets, the Australian dollar is trading at $0.667 on Tuesday.
In Japan, the stock market is sharply lower on Tuesday, extending the mild losses from the previous session. The Nikkei 225 is declining slightly below the 38,400 mark, influenced by mixed Wall Street signals, with declines marked in many sectors, particularly index-heavyweights and technology stocks.
The Nikkei 225 Index concluded the morning session at 38,399.4, a drop of 555.13 points or 1.43%, after reaching an earlier low of 38,200.82. Japanese stocks ended Monday with slight losses.
Market giants like SoftBank Group and Uniqlo operator Fast Retailing are down nearly 2% and over 2% respectively. Among automakers, Honda has fallen almost 1%, while Toyota has inched up by 0.3%.
In the technology sector, Advantest has dropped nearly 2%, Screen Holdings by 1.5%, and Tokyo Electron by over 2%.
In finance, Mitsubishi UFJ Financial, Sumitomo Mitsui Financial, and Mizuho Financial are each down by more than 1%.
Among major exporters, Mitsubishi Electric is down over 2%, Panasonic by more than 1%, and Sony by almost 1%, whereas Canon is up by 0.3%.
Other significant decliners include M3, down over 4%, and Ebara slipping almost 4%, with Ryohin Keikaku and Toto dropping over 3% each. Companies like Minebea Mitsumi, Mercari, Tokyo Tatemono, Socionext, Mitsubishi Electric, Renesas Electronics, and Keisei Electric Railway have declined by almost 3% each.
Conversely, there are no notable gainers reported.
In the currency exchange arena, the U.S. dollar is trading in the higher 150-yen range as of Tuesday.
Elsewhere in Asia, South Korea is down 1%. New Zealand, Singapore, Taiwan, and Indonesia have registered declines ranging from 0.1% to 0.6%, while China, Hong Kong, and Malaysia have each reported gains between 0.1% and 0.5%.
On Wall Street, stock movements showed a mixed pattern on Monday, following recent upward trends. The Dow retreated notably, whereas the tech-focused Nasdaq managed to close positively.The Dow Jones Industrial Average dropped by 344.31 points, equivalent to a 0.8% decrease, settling at 42,931.60. Similarly, the S&P 500 fell by 10.69 points, or 0.2%, to close at 5,853.98. In contrast, the Nasdaq Composite experienced an upward movement, gaining 50.45 points, or 0.3%, to reach 18,540.01.
On the European front, all major stock markets recorded declines. Notably, the UK's FTSE 100 Index decreased by 0.5%, while both the German DAX Index and the French CAC 40 Index saw drops of 1.0%.
Crude oil prices climbed on Monday due to potential supply disruptions stemming from rising tensions in the Middle East. Specifically, West Texas Intermediate (WTI) Crude oil futures for November advanced by $1.34, or 1.94%, closing at $70.56 per barrel.
