FX.co ★ Asian Markets Mostly Lower In Thin Holiday Trading

Most Asian stock markets experienced a downturn in Wednesday's holiday-thinned trading session. This can primarily be attributed to the negative trends in global markets on Tuesday and the surge in Treasury yields due to higher than expected U.S. wage data. The upcoming decision on U.S. Fed's monetary policy also contributed to traders' cautious behavior. Despite the recent downturn, most Asian markets had previously closed higher on Tuesday.

Australian shares took a significant plunge on Wednesday, with the S&P/ASX 200 falling below the 7,600 benchmark. This was mainly driven by negative pressures from global markets and a drop in most sectors, particularly mining and energy, due to falling commodity prices. Key mining companies Mineral Resources and Fortescue Metals saw losses of over 2 percent, while BHP Group and Rio Tinto's shares went down nearly the same percentage. Energy stocks also trended lower, with Woodside Energy and Beach Energy falling more than 2 percent.

Tech stocks also took a hit — Afterpay owner Block and Zip dropped by over 2 percent, while Xero slid almost 3 percent, and WiseTech Global fell by more than 3 percent. Among the leading banks, Commonwealth Bank, Westpac, and ANZ Banking all encountered losses of nearly 1 percent, with National Australia Bank slightly less impacted with a 0.5 percent decrease.

Gold mining companies were similarly affected — Newmont and Resolute Mining shares declined more than 2 percent, Evolution Mining fell nearly 4 percent, while Northern Star Resources and Gold Road Resources experienced downturns of more than 3 percent and almost 5 percent, respectively.

Economic data revealed that Australia's manufacturing sector slowed its decline in April, with a manufacturing PMI score of 49.6, an increase from 47.3 in March. Despite this slight improvement, it still falls shy of the 50 threshold that distinguishes growth from contraction. In currency trading, the Australian dollar was valued at $0.647 on Wednesday.

Japanese stocks also saw a significant drop on Wednesday in response to the broadly negative cues from global markets. The Nikkei 225 witnessed a decline to below the 38,200 benchmark due to advancements in treasury yields and losses across most sectors, especially among index heavyweights and technology stocks. Major losses were seen in SoftBank Group and Uniqlo operator Fast Retailing, both experiencing a decline of nearly 2 percent, as well as Honda and Toyota, both experiencing approximately a 1 percent loss.

Despite the negative trend, some outliers gained on Wednesday's session. Advantest's shares increased by over 2 percent while Mitsubishi Electric gained more than 2 percent. The manufacturing sector of Japan also presented a slowdown in contraction, posting a PMI score of 49.6 for April, up from March's 48.2.

At the day's close, the U.S. dollar was trading in the higher 157 yen-range, marking another eventful day in the Asian stock markets.In other parts of Asia, New Zealand's economy decreased by 0.9 percent. All other markets, including China, Hong Kong, Singapore, Malaysia, South Korea, Taiwan, and Indonesia were shut for Labor Day. On Wall Street, stocks continuously declined on Tuesday, starting weakly due to worries about inflation and doubts about the Federal Reserve's interest rate plans, which ultimately led to a bearish sentiment.

All the significant averages experienced a steep fall, with Nasdaq taking the most significant hit. Dow dropped by 570.17 points or 1.49 percent, closing at 37,815.92. Similarly, the S&P 500 fell 80.48 points or 1.57 percent and closed at 5,035.69, while the Nasdaq plunged 325.26 points or 2.04 percent to close at 15,657.82.

Major European markets followed suit with a downward trend for the day. The UK's FTSE 100 ratio slightly decreased to a 0.04 percent decline, while Germany's DAX and France's CAC 40 experienced a downturn of 1.03 percent and 0.99 percent, respectively.

On Tuesday, crude oil prices trended lower due to a combination of factors: a stronger dollar, increased crude production in the U.S., as well as concerns regarding economic expansion and the future of oil demand. Consequently, West Texas Intermediate Crude oil futures for June fell by $0.70, settling at $81.93 per barrel.