FX.co ★ Asian Markets Track Global Markets Lower

Most Asian stock markets fell on Wednesday, echoing the largely negative global market cues overnight. This happened in the wake of data showing a larger-than-expected increase in U.S. consumer price inflation in January, which lessened the odds of an imminent rate cut by the U.S. Federal Reserve. Investors have henceforth shifted their expectations for rate cuts from March to either May or June. The Asian markets produced mixed results on Tuesday.

As currently illustrated by the CME Group's FedWatch Tool, there is only an 8.5 percent likelihood of a quarter-point rate decrease in March. Meanwhile, the prospects of such a rate cut in early May has dropped to 33.5%.

Australia's stock market significantly dropped on Wednesday, continuing the losses experienced over the past three sessions. The benchmark S&P/ASX 200 fell near the 7,500 level, as the negative global market trends continued. This was led by declines in numerous sectors, including mining, finance, and technology.

The S&P/ASX 200 Index went down by 77.60 points or 1.02 percent to 7,526.00, after going as low as 7,489.40 initially. The more inclusive All Ordinaries Index fell by 79.00 points or 1.01 percent to 7,768.80. On Tuesday, Australian stocks ended with a slight decrease.

Major miners, such as Mineral Resources and Fortescue Metals, saw losses of over 2 percent each, while corporations like BHP Group and Rio Tinto slid by over 1 percent and nearly 1 percent, respectively.

Stocks of oil companies also decreased. Santos and Woodside Energy declined by 0.1 to 0.5 percent each, and Origin Energy declined by almost 1 percent, while Beach energy fell by over 2 percent. In the tech space, company stocks adjusted. For instance, Afterpay owner Block slipped by over 5 percent, Xero decreased by almost 2 percent, and WiseTech Global fell by over 1 percent. In contrast, Appen increased by almost 2 percent and Zip added over 2 percent.

Furthermore, among the big four banks, ANZ Banking and Westpac saw losses of nearly 2 percent each, while National Australia Bank decreased by over 2 percent. Commonwealth Bank dropped by almost 3 percent, following a decrease of 3 percent in the first half of the year's cash profits as margins continued to suffer. Still, it maintained a $2.15 dividend.

Gold mining companies also suffered decreases. Newmont and Northern Star Resources both saw losses of more than 3 percent each, while Gold Road Resources decreased by almost 3 percent, Resolute Mining declined by almost 4 percent, and Evolution Mining dipped by almost 1 percent.

In other news, AMP shares surged by almost 8 percent after the company pledged to return an additional $295 million through future dividends or share buybacks. GrainCorp shares plummeted almost 13 percent as the commodity trading company projected its underlying profits to drop by more than half in FY24 compared to the previous year. Shares of construction group Downer EDI soared 14 percent following its forecast of stronger profit margins in the second half of the year. IDP Education saw a share boost of over 11 percent after reporting a 23 percent net profit growth and a 15 percent increase in first-half revenue.

As for the currency market, the Australian dollar was trading at $0.646 on Wednesday.

The Japanese stock market also witnessed a significant decrease, giving up some of the previous sessions' gains. This followed the general negative cues from global markets overnight. The Nikkei 225, moving away from its 34-year highs, decreased to around the 37,700 level. This was due to losses in index heavyweights and exporters coupled with gains in technology stocks.

The Nikkei 225 Index closed the morning session at 37,646.95, down by 317.02 points or 0.84 percent, having hit a low of 37,627.05 earlier. On Tuesday, the Japanese stock market made significant gains.

Key player SoftBank Group saw a decline of more than 2 percent, while Uniqlo operator Fast Retailing experienced a growth of over 1 percent. In the automobile sector, Honda and Toyota both had declines of over 2 percent.

In the tech space, Advantest saw a growth of 0.5 percent, Tokyo Electron grew by almost 1 percent, and Screen Holdings increased by more than 4 percent. In the banking sector, Mizuho Financial and Mitsubishi UFJ Financial saw a slight decline, while Sumitomo Mitsui Financial slightly increased.

Among major exporters, companies like Sony, Mitsubishi Electric, and Canon witnessed declines of almost 2 percent each, while Panasonic fell by over 3 percent. Other significant losers included Mercari, which fell by 11.5 percent, Shiseido went down by almost 6 percent, and SMC declined by almost 5 percent. Dowa Holdings and Mazda Motor both saw declines of over 4 percent each. Companies such as Hitachi Zosen, Tokai Carbon, Pacific Metals, Nikon, Nippon Paper Industries, Asahi Group, Japan Tobacco, Nippon Steel, and Taiyo Yuden all saw a decrease of almost 4 percent each, and Yamaha fell by over 3 percent.In contrast to the overall trend, Citizen Watch is experiencing a noticeable increase of nearly 6%, while Sapporo Holdings and Idemitsu Kosan are up by more than and close to 5% respectively.

In the foreign exchange market, the US dollar is trading against the yen at a higher range in the 150s as of Wednesday.

On a broader scope, partly across Asia, markets in New Zealand, Hong Kong, South Korea, Singapore, and Indonesia have all fallen between 1.0 and 1.3% each. Similarly, Malaysia has seen a decrease, albeit a smaller one, of 0.4%. The markets in both Taiwan and China remain inactive due to the observance of the Lunar New Year.

The Wall Street experienced considerable downturns during Tuesday's trading. Most notably, the Dow Jones dropped significantly from its record closing highs from Monday. All the major averages saw substantial drops, although they managed to recover somewhat before closing. Still, the Dow Jones fell 524.63 points or 1.4% to 38,272.75, the Nasdaq's fall amounted to 286.95 points or 1.8% making its new index 15,655.60, and the S&P 500 dropped 68.67 points or 1.4% to 4,953.17.

European markets also saw declines. The German DAX Index fell 0.9%, the French CAC 40 Index and the FTSE 100 Index from the U.K. each slid by 0.8%.

Global concerns about supply due to the persisting conflict in the Middle East led to a rise in crude oil prices on Tuesday. The price of West Texas Intermediate Crude oil futures for March rose by $0.95 or 1.25% to $77.87 a barrel, marking a seventh consecutive session of increase.