Asian Markets Track Wall Street Higher

Following the broadly positive cues from Wall Street overnight, Asian stock markets are trading mostly higher on Thursday, after the US Fed left interest rates unchanged and reiterated expectations for three quarter point interest rate cuts later this year, which had been in some doubt. Traders also reacted to a couple of domestic economic data each from Australia and Japan. Asian Markets closed mostly higher on Wednesday.

The latest projections suggest that Fed officials expect rates to be lowered to a range of 4.50 to 4.75 percent by the end of 2024. In the accompanying statement, Fed officials acknowledged inflation has eased over the past year, but still need “greater confidence” inflation is moving sustainably toward 2 percent before cutting rates.

The Australian market is significantly higher on Thursday, recouping the slight losses in the previous session, following the broadly positive cues from Wall Street overnight. The benchmark S&P/ASX 200 is moving well above the 7,700 level, with gains in gold miners, financial and technology stocks after the US Fed reaffirmed expectations for three interest rate cuts this year. Traders also react to domestic unemployment, jobless rate and manufacturing data.

The benchmark S&P/ASX 200 Index is gaining 65.30 points or 0.85 percent to 7,761.10, after touching a high of 7,776.50 earlier. The broader All Ordinaries Index is up 69.10 points or 0.87 percent to 8,023.60. Australian stocks ended slightly lower on Wednesday.

Among major miners, Rio Tinto and BHP Group are losing almost 1 percent each, while Fortescue Metals is edging up 0.1 percent and Mineral Resources is adding 1.5 percent.

Oil stocks are mostly weak. Santos, Woodside Energy and Origin Energy are edging down 0.1 to 0.3 percent each, while Beach energy is flat.

In the tech space, Xero is gaining almost 2 percent, Afterpay owner Block is adding more than 2 percent and Zip is surging more than 7 percent, while Appen is losing almost 3 percent. WiseTech Global is flat.

Among the big four banks, Commonwealth Bank and Westpac are gaining more than 1 percent each, while National Australia Bank is adding more than 2 percent and ANZ Banking is up almost 1 percent.

Among gold miners, Evolution Mining is gaining 3.5 percent, Gold Road Resources is adding almost 1 percent, Resolute Mining is advancing almost 5 percent, Northern Star Resources is up more than 2 percent and Newmont is rising more than 3 percent.

In economic news, Australia’s unemployment rate came in at a seasonally adjusted 3.7 percent in February, the Australian Bureau of Statistics said on Thursday – well beneath forecasts for 4.0 percent and down from 4.1 percent in January.

The Australian economy added 116,500 jobs last month, blowing away forecasts for an increase of 39,700 jobs following the addition of 500 jobs in the previous month. Full-time jobs saw an increase of 78,200 after adding 11,100 a month earlier. The participation rate fell to 66.7 percent, shy of expectations for 66.8 percent – which would have been unchanged.

Meanwhile, the manufacturing sector in Australia continued to contract in March, the latest survey from Judo Bank revealed on Thursday with a manufacturing PMI score of 46.8. That’s down from 47.8 in February, and it moves further beneath the boom-or-bust line of 50 that separates expansion from contraction. The survey also showed that the services PMI improved to 53.5 in March from 53.1 in February.

In the currency market, the Aussie dollar is trading at $0.662 on Thursday.

Extending the gains in the previous two sessions, the Japanese market is sharply higher on Thursday, following the broadly positive cues from Wall Street overnight. The Nikkei 225 is moving well above the 40,600 level to fresh all-time highs, with gains across most sectors led by index heavyweights and financial stocks as traders react to the US Fed reaffirming expectations for three interest rate cuts this year

The benchmark Nikkei 225 Index closed the morning session at 40,670.52, up 666.92 points or 1.67 percent, after touching an all-time high of 40,748.77 earlier. Japanese shares ended notably higher on Tuesday ahead of the holiday on Wednesday.

Market heavyweight SoftBank Group is gaining more than 2 percent and Uniqlo operator Fast Retailing is adding almost 2 percent. Among automakers, Toyota is gaining more than 3 percent and Honda is adding more than 1 percent.

In the tech space, Advantest is edging up 0.2 percent, Tokyo Electron is adding more than 2 percent and Screen Holdings is gaining more than 1 percent.

In the banking sector, Sumitomo Mitsui Financial is gaining almost 1 percent, while Mitsubishi UFJ Financial and Mizuho Financial are adding almost 2 percent each.

Among the major exporters, Canon and Panasonic are gaining more than 1 percent each, while Mitsubishi Electric and Sony are adding almost 1 percent each.

Among other major gainers, Nidec and UBE are gaining more than 5 percent each, while Mitsui & Co., Concordia Financial Group, Taisei, NEXON, Amada and Isetan Mitsukoshi are adding more than 4 percent each. Sumco, Sumitomo Pharma, Mitsubishi Heavy Industries, Hitachi and Marubeni are advancing almost 4 percent each. Toppan Holdings is up more than 3 percent.

Conversely, there are no other major losers.

In economic news, the manufacturing sector in Japan continued to contract in March, albeit at a slower pace, the latest survey from Jibun Bank revealed on Thursday with a manufacturing PMI score of 48.2. That’s up from 47.2 in February, although it remains beneath the boom-or-bust line of 50 that separates expansion from contraction. The survey also showed that the services PMI improved to 54.9 in March from 52.9 in February.

Meanwhile, Japan posted a merchandise trade deficit of 379.4 billion yen in February, the Ministry of Finance said on Thursday. That beat forecasts for a deficit of 810.2 billion yen following the 1,758.3 billion yen shortfall in January.

Exports jumped 7.8 percent on year, topping expectations for an increase of 5.3 percent following the 11.9 percent gain in the previous month. Imports rose 0.5 percent on year versus expectations for a gain of 2.2 percent following the downwardly revised 9.8 percent drop a month earlier (originally -9.6 percent).

In the currency market, the U.S. dollar is trading in the lower 150 yen-range on Thursday.

Elsewhere in Asia, Hong Kong and Taiwan are up 2.2 and 1.6 percent, respectively. New Zealand, China, Singapore, South Korea, Malaysia and Indonesia are higher by between 0.1 and 0.9 percent each.

On Wall Street, stocks showed a lack of direction throughout much of the trading session on Wednesday before rallying following the Federal Reserve’s monetary policy announcement. The major averages all showed strong moves to the upside, reaching new record closing highs.

The major averages reached new highs for the session in the final hour of trading, ending the day sharply higher. The Dow jumped 401.37 points or 1.0 percent to 39,512.13, the Nasdaq surged 202.62 points or 1.3 percent to 16,369.41 and the S&P 500 advanced 46.11 points or 0.9 percent at 5,224.62.

Meanwhile, the major European markets turned in a mixed performance on the day. While the German DAX Index rose 0.2 percent, the U.K.’s FTSE 100 Index closed just below the unchanged line and the French CAC 40 Index slid by 0.5 percent.

Crude oil prices fell sharply on Wednesday as traders chose to take some profits following recent gains, while a firm dollar also weighed on oil prices. West Texas Intermediate Crude oil futures for April slumped $1.79 or 2.1 percent at $81.68 a barrel.