FX.co ★ Asian Markets Mostly Lower

Asian stock markets have followed a downward trend, mainly due to the anticipated US Federal Reserve's decision on interest rates, which could significantly influence the prospects for interest rates. Traders are also reacting to an assortment of economic data from the US, China, Australia and Japan.

Despite a mixed performance from Wall Street, Australian shares are faring well, with the benchmark S&P/ASX 200 Index surpassing the 7,600 mark. The Australian market, however, showed losses in mining and technology stocks, negating some gains in energy stocks.

The S&P/ASX 200 Index, after a rocky start, is up by 45.3 points (or 0.60%) to 7,645.50. Major miners, such as Rio Tinto and BHP, show slight losses of 0.4 to 0.5 percent each, while Fortescue Metal's losses near 1 percent, and Mineral Resources' decline extends beyond 1 percent.

Oil stocks overall are showing some progress. Woodside Energy and Beach Energy show gains of almost 1 and 2 percent, respectively, while Santos remains flat. In the tech industry, Afterpay owner block's shares decline by 2 percent, Xero's shares are down by more than 1 percent and Appen's shares decline by almost 3 percent. Conversely, Zip is up by 0.4 percent and WiseTech Global is gaining almost 1 percent.

Among major banks, National Australia Bank is down by 0.2 percent, while Commonwealth Bank, ANZ Banking, and Westpac are up by 0.1 to 0.4 percent each. Meanwhile, gold miners Northern Star Resources and Resolute Mining are declining by over 2 percent.

As per the Reserve Bank of Australia's statement, private sector credit in Australia increased by 0.4 percent month on month in December, unchanged from November.

In response to recent consumer price data, the Australian Bureau of Statistics revealed that consumer prices increased by 4.1 percent yearly in the fourth quarter of 2023, a result lower than the anticipated 4.3 percent.

The Japanese stock market is also suffering losses, with the Nikkei 225 falling below the 35,900 mark. This is attributable to weak performance by index heavyweights and tech stocks, despite gains in financial stocks.

The Nikkei 225 Index plummeted by 188.90 points (or 0.52%) to 35,876.96 with market heavyweight SoftBank Group declining by almost 2 percent. The auto industry however, looks promising with Honda and Toyota showing gains. Despite these minor victories, Canon with a more than 6 percent surge, is amongst the few winners in the current market.The Ministry of Economy, Trade and Industry in Japan reported a slight 1.8% increase in industrial production in December—a disappointing outcome compared to forecasts for an increase of 2.4 percent. This comes after a dip of 0.9% in the previous month. When considered on a yearly basis, industrial production shrank by 0.7%.

Retail sales for December in the same country rose by 2.1% year on year, amounting to 15.515 trillion yen. Despite the increase, it fell short of expectations that predicted a larger growth of 4.7%—a substantial dip from the previous month’s 5.4% jump. Retail sales saw a 2.9% monthly decrease. However, the final quarter of 2023 experienced a yearly rise in retail sales by 3.8%, even though it was counterbalanced by a 1.7% quarter on quarter decrease at 42.989 trillion yen. For the entirety of 2023, retail sales experienced a healthy growth of 5.6%, closing at 162.996 trillion yen.

On the foreign exchange front, the US dollar traded at a higher rate when compared to the yen on Wednesday.

Asian markets reported varying results. Both Hong Kong and China saw a decrease by 1.3% and 1.1% respectively, while New Zealand, South Korea, Malaysia and Taiwan saw smaller decreases between the range of 0.1 to 0.6%. In contrast, both Indonesia and Singapore experienced growth—the former by 0.3% and the latter by 0.1%.

Wall Street delivered a mixed performance in latest trading. Even though the Dow Jones managed to climb to a record high, tech heavy Nasdaq saw a significant drop. In contrast, major European markets showed positive movement with the German DAX Index up by 0.2% and both the UK's FTSE 100 Index and the French CAC 40 Index grew by 0.4% and 0.5% respectively.

Crude oil prices had a surge on Tuesday, which counterbalanced the previous session's steep decrease, following the International Monetary Fund's upward adjustment of its global growth projections for 2024. Specifically, the West Texas Intermediate for March delivery increased by $1.04, or 1.4%, to finish at $77.82 per barrel.