Asian stock markets are showing predominantly upward trends on Monday, spurred by robust performances in China, Hong Kong, and South Korea, in spite of the generally negative signals from Wall Street last Friday. Investors are responding to the US Federal Reserve Chair Jerome Powell's recent hawkish remarks, indicating that the Fed intends to take a cautious approach to future monetary policy decisions rather than rushing to lower interest rates. Notably, Asian markets had closed with mixed results on Friday.
Powell praised the current state of the economy as "remarkably good" and described the labor market as "solid," while acknowledging that inflation is nearing the Federal Reserve's target levels.
Despite this background, the Fed is still anticipated to cut interest rates next month. Nevertheless, the CME Group's FedWatch Tool indicates that the probability of a quarter-point rate cut has dipped to 65.3 percent from 72.2 percent recorded on Thursday.
The Australian stock market witnessed a slight uptick on Monday, rebounding from an initial downturn in line with gains over the previous two sessions despite adverse cues from Wall Street. The S&P/ASX 200 index remains just shy of the 8,300 mark, with positive performances in mining and energy sectors largely counterbalanced by weaker technology and financial stocks.
Specifically, the S&P/ASX 200 Index rose 9.00 points, or 0.11 percent, to 8,294.20, reaching a low of 8,244.30 earlier. The broader All Ordinaries Index also saw an increase of 9.40 points or 0.11 percent, climbing to 8,548.40. Australian equities had closed notably higher on Friday.
Key mining players such as BHP Group advanced nearly 1 percent, Rio Tinto gained close to 2 percent, Fortescue Metals edged up 0.2 percent, and Mineral Resources saw an almost 4 percent rise. Oil stocks also saw upward movement, with Beach Energy, Origin Energy, and Santos each gaining over 1 percent, while Woodside Energy marginally increased by 0.5 percent.
In the tech sector, Afterpay's owner Block rose by 1.5 percent and WiseTech Global nearly 1 percent, despite downturns in Appen, which fell over 5 percent, Xero, which was down nearly 1 percent, and Zip, which decreased by 2.5 percent.
Gold mining firms mostly experienced gains, with Evolution Mining up more than 3 percent, Newmont increasing nearly 1 percent, while Northern Star Resources and Gold Road Resources both climbed over 2 percent.
Among the major banks, National Australia Bank and ANZ Banking each declined nearly 1 percent, while Commonwealth Bank dropped slightly over 1 percent. Westpac remained unchanged.
Additionally, Australian uranium miners Paladin Energy and Boss Energy experienced surges of nearly 7 percent following Russia's announcement of a ban on uranium exports to the U.S. Silex Systems saw a significant rise of more than 11 percent.
The Australian dollar is trading at $0.647 as of Monday.
Contrastingly, the Japanese stock market is experiencing a decline on Monday, reversing previous session gains. The Nikkei 225 Index slumped above the 38,400 level, influenced by Wall Street's negative performance last Friday, with notable downturns in major sectors, particularly financial and technology stocks.
The Nikkei 225 Index concluded the morning session at 38,343.39, a decrease of 299.52 points or 0.78 percent, after earlier reaching a low of 38,150.39. Japanese equities had ended modestly higher on Friday.
Key Japanese market players such as SoftBank Group and Fast Retailing encountered losses of nearly 2 percent and 1 percent, respectively. Among automakers, Honda recorded a 0.4 percent uptick, while Toyota fell by more than 1 percent.
In the technology sector, both Screen Holdings and Tokyo Electron declined nearly 2 percent, whereas Advantest saw a gain of nearly 1 percent.
Within the banking sector, Sumitomo Mitsui Financial fell close to 1 percent, Mizuho Financial slightly edged down by 0.5 percent, while Mitsubishi UFJ Financial remained steady.
Major exporters were mostly in decline, with Panasonic and Canon each slightly down by 0.3 to 0.4 percent, and Mitsubishi Electric dropping 1.5 percent. In contrast, Sony rose nearly 1 percent.
Significant declines were observed in Chugai Pharmaceutical and Dentsu Group, both down more than 7 percent, while Aozora Bank and Ebara decreased over 6 percent each. Eisai fell more than 4 percent, and Otsuka Holdings dipped nearly 4 percent. IHI dropped over 3 percent, while Mitsubishi Heavy Industries, Astellas Pharma, Daiichi Sankyo, Shionogi & Co., Renesas Electronics, and Resona Holdings each fell close to 3 percent.
Conversely, Ryohin Keikaku surged nearly 7 percent, M3 gained more than 5 percent, Taise climbed over 4 percent, and Mercari was up almost 3 percent.
In other economic news, Japan's Cabinet Office reported on Monday that the total value of core machine orders fell by a seasonally adjusted 0.7% in September, amounting to 852.0 billion yen. This was below expectations for a 1.4 percent increase, following a 1.9 percent drop in August.In the realm of core machine orders, there has been a notable year-on-year decline of 4.8%, following a 3.4% drop in the preceding month. Analyzing the third quarter of 2024, these orders decreased by 1.3% on a quarterly basis and 0.4% annually. However, projections for the fourth quarter of 2024 are more optimistic, with expectations of a 5.7% quarterly rise and an 8.0% annual increase.
Turning to the currency market, the U.S. dollar is experiencing a robust performance, trading in the upper 154 yen range as of Monday.
Elsewhere in Asia, the markets of China, Hong Kong, and South Korea have each faced downturns, ranging from 1.5% to 2.2%. Conversely, New Zealand, Singapore, and Malaysia have seen modest gains, ranging between 0.1% and 0.5%. Meanwhile, Indonesia has declined by 0.8% and Taiwan has decreased by 0.1%.
On Wall Street, Friday saw a significant downward trend in stocks, exacerbated by pressures from late Thursday. Major indices dropped sharply, retracting from Monday's record highs. Although they recovered from their lowest points by the end of the trading day, they remained firmly negative. Leading the decline was the tech-centric Nasdaq, which plummeted by 427.53 points, or 2.2%, closing at 18,680.12. The S&P 500 also fell by 78.55 points, or 1.3%, ending at 5,870.62, while the Dow slid by 305.87 points, or 0.7%, to close at 43,444.99.
Likewise, European markets experienced downward movement. The French CAC 40 Index dropped by 0.6%, the German DAX Index by 0.3%, and the U.K.'s FTSE 100 Index by 0.1%.
In commodities, crude oil prices experienced a sharp decline on Friday, fueled by concerns over demand outlook, an increase in U.S. crude inventories, and a strengthening dollar. West Texas Intermediate Crude oil futures for December fell by $1.68, or 2.45%, to $67.02 per barrel, contributing to a 5% drop over the week.