Asian stock markets exhibited a mixed performance on Thursday, with investors erring on the side of caution in anticipation of crucial U.S. inflation data due later in the day. The markets' negative cues were guided by Wall Street's overnight performance, prompting some traders to take profits from recent market gains.
The awaited U.S inflation data carries significance, as it could significantly influence interest rates. U.S. Federal Reserve officials have previously stated that they require greater assurance of slowing inflation before implementing rate cuts.
The Australian market, after opening in negative territory, managed a modest recovery on Thursday, compensating for the previous session's losses stemming from Wall Street's negative cues. Gold miners and energy stocks propped up the benchmark S&P/ASX 200 Index slightly, keeping it below the 7,700 mark.
Major miners such as BHP Group and Rio Tinto saw minor losses, with Fortescue Metals and Mineral Resources falling nearly 2 percent each. Oil stocks showed mixed performance while tech stocks, including Appen and Xero, slipped nearly 2 percent each. Among the major banks, Commonwealth Bank, ANZ Banking, and National Australia Bank saw slight declines while Westpac fell just under 1 percent.
Total retail sales in Australia rose by a seasonally adjusted 1.1 percent in January, according to data released by the Australian Bureau of Statistics (ABS), falling short of the forecasted 1.6 percent increase.
In contrast, the ABS reported that the total value of new capital expenditure exceeded predictions, with a seasonally adjusted rise of 0.8 percent in the fourth quarter of 2023, totaling A$40.061 billion. In the private sector, overall credit rose by a seasonally adjusted 0.4 percent in January, hitting expectations.
The Japanese market was significantly down on Thursday, following Wall Street's lead. The Nikkei 225 was under the 38,000 markers, with weakness observed across most sectors, primarily among index heavyweights and exporter stocks. Market giants SoftBank Group and Fast Retailing experienced minor losses while automakers, including Toyota and Honda, showed mixed performance.
Major tech companies, banking sector titans, and exporters such as Canon, Panasonic, Mitsubishi Electric, and Sony all reported losses while a few companies like Aozora Bank, Seven & I Holdings, Kawasaki Kisen Kaisha, and Alps Alpine recorded gains.
The latest economic reports highlight a significant decline in industrial production in Japan. According to data from the Ministry of Economy, Trade and Industry (METI), industrial output dropped 7.5 percent in January, failing to meet forecasts predicting a decline of just 6.7 percent. This disappointing figure follows an increase of 1.4 percent in December. Annually, the rate of industrial production experienced a 1.5 percent decrease. Based on this information, METI has revised its evaluation of industrial production, describing it as 'indecisive' and in a weakened state. However, they predict a monthly increase of 4.8 percent in February, and 2.0 percent in March.
Regarding retail, METI reported a 2.3 percent increase year-on-year in January, amounting to a total of 13.141 trillion yen. This figure exceeded expectations, which predicted a 2.0 percent increase. Retail sales saw a monthly increase of 0.8 percent, a trend reversal following a 2.6 percent decrease in the previous month.
In the currency market, the U.S. dollar has reached a high trading value in the 149-yen range. Asian market updates show a 1.2 percent increase in China with minor increases in Hong Kong, Malaysia, and Taiwan. In contrast, New Zealand, South Korea, and Indonesia have seen minor decreases, while Singapore remains relatively stable.
On Wall Street, despite an early downturn, stocks managed to regain ground, although the major averages still finished the day in negative territory. The Dow closed lower for the third consecutive session, the S&P 500 dipped by 0.2 percent, and the Nasdaq slid by 0.6 percent.
In Europe, the markets presented a mixed performance. The UK's FTSE 100 Index slid by 0.1 percent, while the French CAC 40 Index rose slightly by 0.1 percent and the German DAX Index increased by 0.3 percent.
In oil news, crude prices fell after data showed a larger than expected increase in U.S. crude inventories last week. The West Texas Intermediate Crude oil futures for April ended down at $78.54 a barrel, marking a $0.33 or 0.42 percent decrease.
