Asian stock markets are largely trending upward on Tuesday, influenced by positive signals from Wall Street after the previous session. However, traders appear cautious about making significant moves during what is anticipated to be a quieter week, given the upcoming Christmas holidays. The anticipation of further interest rate reductions by the U.S. Federal Reserve next year is boosting market sentiment. Asian markets closed mostly in the green on Monday.
In Australia, the stock market is experiencing slight gains on Tuesday, despite briefly dipping into negative territory. This expansion follows Monday's significant gains, prompted by positive Wall Street influences. The S&P/ASX 200 index hovers just above the 8,200 mark, with varied performance across different sectors and a lack of clear direction due to the approaching holidays.
The S&P/ASX 200 Index has risen 13.00 points or 0.16 percent to reach 8,214.60, after hitting a peak of 8,215.80 and a low of 8,193.50 earlier in the session. The broader All Ordinaries Index has climbed 13.20 points or 0.16 percent to 8,465.90. Australian equities posted significant gains on Monday.
In the mining sector, major players like BHP Group and Rio Tinto are down by approximately 1 percent each, while Fortescue Metals and Mineral Resources have each inched up by 0.2 percent.
Oil stocks are mostly performing well, with Origin Energy and Beach Energy rising between 0.3 to 0.4 percent respectively, and Woodside Energy gaining nearly 1 percent. However, Santos has slipped by 0.2 percent.
Among technology stocks, Afterpay's parent company Block has decreased by 1.5 percent, Zip has fallen by over 3 percent, and Appen has dropped nearly 2 percent. Conversely, WiseTech Global has gained more than 1 percent, and Xero is slightly up by 0.1 percent.
Gold mining stocks are generally seeing declines, with Gold Road Resources, Newmont, and Evolution Mining slipping between 0.1 to 0.5 percent each. Meanwhile, Resolute Mining has fallen by 2.5 percent, and Northern Star Resources is down nearly 1 percent.
Commonwealth Bank has marginally decreased by 0.1 percent, but ANZ Banking, Westpac, and National Australia Bank have each seen minor rises between 0.1 to 0.2 percent.
In economic news, the Reserve Bank of Australia's Monetary Policy Board members indicated that the nation's gross domestic product remains subdued and softer than expected, as detailed in the minutes from the central bank's meeting on December 9-10. During this meeting, the Board maintained the cash rate target at a 13-year high of 4.35 percent. The interest rate was last adjusted in November 2023, increased by 25 basis points to its highest level since 2011.
In the currency market, the Australian dollar is trading at $0.624 on Tuesday.
The Japanese stock market is modestly down on Tuesday, retreating from gains in the previous session. The Nikkei 225 has slipped slightly above the 39,000 mark, despite positive Wall Street influences, due to weakness in key indices and some exporter stocks.
The Nikkei 225 Index concluded the morning session at 39,055.35, down 105.99 points or 0.27 percent, after a low of 38,995.76 earlier. Japanese stocks experienced significant gains on Monday.
Significant decliners include SoftBank Group, which is down nearly 2 percent, and Fast Retailing, the operator of Uniqlo, declining almost 1 percent. In the automotive sector, Honda has surged over 15 percent, while Toyota has inched up by 0.2 percent.
In technology, Advantest has lost over 1 percent, and Tokyo Electron is down 0.1 percent, while Screen Holdings has edged upward by 0.5 percent.
In banking, Mitsubishi UFJ Financial has gained 0.2 percent, whereas Mizuho Financial and Sumitomo Mitsui Financial have each increased by nearly 1 percent.
Leading exporters are mostly declining, with Panasonic losing over 1 percent and Mitsubishi Electric down 0.5 percent, while Canon has risen almost 1 percent, and Sony remains unchanged.
Among significant decliners, Toho is down by 5.5 percent, while Fujikura, DeNA, Furukawa Electric, and Rakuten Group have each dropped over 3 percent. Mercari is nearly 3 percent lower.
Conversely, Mitsubishi Motors and Chubu Electric Power have both gained nearly 3 percent.
On the economic front, the Bank of Japan's Monetary Policy Board members observed that Japan's economy is consistently growing and is projected to continue expanding above the trend, as per the minutes from the central bank's October 30-31 meeting. The BoJ decided to maintain the uncollateralized overnight call rate at around 0.25 percent, the highest since late 2008. The BoJ ended its negative interest rate policy in March and raised the benchmark rate in July to the current level.
In currency trading, the U.S. dollar is in the lower 157 yen range on Tuesday.Throughout Asia, Hong Kong experienced a 1.2% increase, while markets in New Zealand, China, Singapore, Malaysia, Taiwan, and Indonesia saw gains ranging from 0.1% to 0.8%. Conversely, South Korea diverged from the regional trend, reporting a 0.3% decline.
On Wall Street, stocks predominantly advanced on Monday after experiencing initial indecisiveness during the session. The major indices continued to build on the substantial gains achieved on Friday, therefore countering the market downturn observed last Wednesday.
As the trading day progressed, both the Nasdaq and the S&P 500 solidly moved into positive territory. The Dow Jones Industrial Average saw a more modest increase. Specifically, the Nasdaq surged by 192.29 points, or 1.0%, closing at 19,764.89; the S&P 500 advanced by 43.22 points, or 0.7%, reaching 5,974.07; meanwhile, the Dow saw a rise of 66.69 points, or 0.2%, settling at 42,906.95.
In contrast, European markets delivered a mixed performance. The U.K.'s FTSE 100 Index edged up by 0.2%, the French CAC 40 Index ended slightly below the breakeven mark, and the German DAX Index fell by 0.2%.
Crude oil prices declined on Monday due to concerns over a potential supply surplus, compounded by the impact of a stronger U.S. dollar. West Texas Intermediate crude oil futures for February decreased by $0.26, or 0.3%, closing at $69.20 per barrel.
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