Asian Markets Mixed Amid Cautious Trades

Asian stock markets are trading mixed on Tuesday, following the broadly positive cues from Wall Street overnight, as traders remain cautious and are reluctant to make big moves ahead of crucial reports on key inflation readings from China and the U.S. later in the week, which could affect the outlook for interest rates. Asian markets closed mostly lower on Monday.

Most economists expect another pause in interest rate hikes by the Fed next month, although the data has led to some uncertainty about the outlook for rates beyond that.

Comments from Fed Governor Michele Bowman revealed that the central bank needs to hike interest rates to bring inflation to the 2% target -Traders also noted comments from New York Fed President John Williams that the central bank needs to keep the restrictive stance for some time.

The Australian stock market is modestly higher on Tuesday, recouping the losses in the previous session, with the benchmark S&P/ASX 200 staying above the 7,300 level, following the broadly positive cues from Wall Street overnight, with gains across most sectors, led by mining and financial stocks.

The benchmark S&P/ASX 200 Index is gaining 14.00 points or 0.19 percent to 7,323.20, after touching a high of 7,342.50 earlier. The broader All Ordinaries Index is up 12.90 points or 0.17 percent to 7,532.80. Australian stocks closed modestly lower on Monday.

Among the major miners, Rio Tinto, BHP Group and Mineral Resources are edging up 0.3 to 0.4 percent each, while Fortescue Metals is advancing almost 2 percent.

Oil stocks are higher. Woodside Energy and Origin Energy are edging up 0.1 percent each, while Santos is gaining almost 1 percent. Beach energy is flat.

Among tech stocks, Afterpay owner Block is losing almost 1 percent and Appen is edging down 0.2 percent, while Xero and WiseTech Global are gaining almost 1 percent each. Zip is adding more than 1 percent.

Gold miners are mostly lower. Northern Star Resources is losing more than 1 percent, Resolute Mining is down almost 1 percent and Evolution Mining is edging down 0.1 percent, while Gold Road Resources is gaining more than 1 percent. Newcrest Mining is flat.

Among the big four banks, Commonwealth Bank, ANZ Banking and Westpac are edging up 0.2 to 0.5 percent each, while National Australia Bank is gaining almost 1 percent.

In other news, shares in James Hardie Industries are soaring more than 15 percent after the building products company reported upbeat quarterly results.

Share in Coronado Global Resources are plunging more than 10 percent after it posted a 24 percent drop in revenue, while adjusted earnings slipped 58.4 percent from last year as coal prices continue to slide from historic highs.

Shares in Myer are sliding more than 14 percent despite the department store chain upgrading profit expectations for financial year 2023 in its latest trading update.

In the currency market, the Aussie dollar is trading at $0.655 on Tuesday.

The Japanese stock market is modestly higher on Tuesday, extending the gains in the previous two sessions, with the Nikkei 225 moving above the 32,300 level, following the broadly positive cues from Wall Street overnight, with gains in index heavyweights, exporters and financial stocks.

The benchmark Nikkei 225 Index closed the morning session at 32,358.10, up 103.54 points or 0.32 percent, after touching a high of 32,539.88 earlier. Japanese shares ended modestly higher on Monday.

Market heavyweight SoftBank Group is gaining more than 1 percent and Uniqlo operator Fast Retailing is edging up 0.4 percent. Among automakers, Honda is adding more than 1 percent, while Toyota is edging down 0.1 percent.

In the tech space, Advantest is losing more than 2 percent and Screen Holdings is declining more than 1 percent, while Tokyo Electron is gaining almost 1 percent.

In the banking sector, Sumitomo Mitsui Financial is edging up 0.1 percent, Mitsubishi UFJ Financial is gaining almost 1 percent and Mizuho Financial is adding more than 1 percent.

The major exporters are higher. Canon is gaining almost 1 percent, while Panasonic, Mitsubishi Electric and Sony are edging up 0.1 to 0.3 percent each.

Among the other major gainers, Comsys Holdings is soaring almost 9 percent, while Japan Steel Works, Kikkoman and Kawasaki Kisen Kaisha are surging almost 5 percent each. Ajinomoto is gaining almost 4 percent, while Kawasaki Heavy Industries and Otsuka Holdings are advancing more than 3 percent each. Meiji Holdings, Tokyu Fudosan, Tokyo Gas, Kubota, Takara Holdings, Sumitomo Heavy Industries and Mitsubishi Heavy Industries are adding almost 3 percent each.

Conversely, Nippon Paper Industries is losing almost 7 percent, Sharp is declining almost 5 percent and Z Holdings is down almost 3 percent.

In economic news, the average of household spending in Japan was down 4.2 percent on year in June, the Ministry of Internal Affairs and Communications said on Tuesday – coming in at 275,545 yen. That missed expectations for an annual decline of 4.1 percent following the 4.0 percent contraction in May. The average monthly income per household stood at 898,984 yen, down 5.6 percent on year. On a monthly basis, household spending jumped 0.9 percent – beating forecasts for an increase of 0.3 percent after sinking 1.1 percent in the previous month.

The Bank of Japan said overall bank lending in Japan was up 2.9 percent on year in July, coming in at 605.389 trillion yen. That was shy of expectation for an increase of 3.1 percent, which would have been unchanged from the June figure following a downward revision from 3.2 percent. Excluding trusts, bank lending rose an annual 3.3 percent to 528.379 trillion yen, easing from 3.4 percent a month earlier.

Meanwhile, Japan posted a current account surplus of 1.509 trillion yen in June, the Ministry of Finance said on Tuesday. That beat expectations for a surplus of 1.395 trillion yen following the 1.862 trillion yen surplus in May. Exports were up 0.5 percent on year to 8.630 trillion yen and imports slumped 14.3 percent to 8.301 trillion yen for a trade surplus of 328.7 billion yen. The capital account showed a deficit of 42.0 billion yen and the financial account had a surplus of 545.2 billion yen.

In the currency market, the U.S. dollar is trading in the lower 143 yen-range on Tuesday.

Elsewhere in Asia, Hong Kong is down 1.6 percent, while New Zealand, China, South Korea and Taiwan are lower by between 0.1 and 0.7 percent each. Singapore, Malaysia and Indonesia are higher by between 0.1 and 0.3 percent each.

On the Wall Street, stocks closed on a firm note on Monday, recovering well after recent sharp losses, as investors looked ahead to more earnings updates and data on U.S. consumer and producer price inflation, due later in the week.

The major averages all closed higher. The Dow settled at 35,473.13, gaining 407.51 points or 1.16 percent, the S&P 500 ended with a gain of 40.41 points or 0.9 percent at 4,518.44 and the Nasdaq climbed 85.16 points or 0.61 percent to 13,994.40.

Meanwhile, the major European markets finished the day mixed. While the French CAC 40 Index was up by 0.6 percent, the German DAX Index inched down by 0.1 percent and the U.K.’s FTSE 100 Index was down by 0.13 percent.

Crude oil futures settled lower on Monday, coming off the four-month highs they touched last week. The dollar’s strength ahead of inflation data weighed on oil prices. West Texas Intermediate Crude oil futures for September shed $0.88 or 1.1 percent at $81.94 a barrel.

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