Asian stock markets are trading mostly higher on Monday, following the broadly positive cues from Wall Street on Friday, on a spike in commodity prices and easing worries about the coronavirus Omicron variant’s impact on global economic growth. Asian markets closed mostly lower on Friday.
Data from the Labor Department showed U.S. consumer prices surged at the fastest annual rate of in nearly 40 years in November. The elevated rate of inflation may lead the Federal Reserve to accelerate the pace of tapering its asset purchases next week.
Meanwhile, traders continued to closely follow the updates on the vaccine front. Preliminary results indicated that three doses of the Pfizer-BioNTech Covid vaccine were needed to obtain the same level of protection against Omicron. However, the World Health Organization (WHO) said it remained unclear whether additional Covid-19 vaccine doses are needed to protect against the new Omicron variant.
The Australian stock market is significantly higher on Monday, recouping the losses in the previous two sessions, with the benchmark S&P/ASX 200 moving above the 7,400 level, following the broadly positive cues from Wall Street on Friday, with strength i materials and energy stocks amid higher commodity prices.
Meanwhile, concern that the omicron variant will set back the fight against COVID-19 is weighing on the market. New South Wales reported 536 new cases on Sunday, with nine new Omicron cases. Victoria also reported 1,290 new cases and two deaths, with no Omicron cases. Meanwhile, Queensland borders open up to Victoria and New South Wales after months of closure.
The benchmark S&P/ASX 200 Index is gaining 43.50 points or 0.59 percent to 7,397.00, after touching a high of 7,417.70 earlier. The broader All Ordinaries Index is up 45.80 points or 0.60 percent to 7,713.70. Australian stocks closed modestly lower on Friday.
Among the major miners, Rio Tinto is gaining almost 2 percent, Fortescue Metals is adding more than 1 percent and BHP Group is advancing more than 2 percent, while Mineral Resources and OZ Minerals are up almost 1 percent each. Oil stocks are higher, with Woodside Petroleum gaining almost 2 percent, Origin Energy up almost 1 percent, Santos adding more than 1 percent and Beach energy advancing almost 3 percent. Among tech stocks, Appen and WiseTech Global are gaining almost 3 percent each, while Afterpay and Xero are edging down 0.4 percent each. Gold miners are higher. Evolution Mining is gaining 1.5 percent and Newcrest Mining is edging up 0.3 percent, while Gold Road Resources is edging down 0.3 percent. Resolute Mining and Northern Star Resources are flat.
Among the big four banks, Commonwealth Bank is gaining more than 1 percent and Westpac is edging up 0.3 percent, while ANZ Banking and National Australia Bank are adding almost 1 percent each.
In the currency market, the Aussie dollar is trading at $0.717 on Monday.
The Japanese stock market is significantly higher on Monday, recouping the losses in the previous two sessions, with the Nikkei 225 just below the 28,700 level, following the broadly positive cues from Wall Street on Friday and after data from the Bank of Japan’s Tankan Survey suggested the economy is gradually improving.
The benchmark Nikkei 225 Index closed the morning session at 28,696.68, up 258.91 points or 0.91 percent, after touching a high of 28,793.32 earlier. Japanese shares ended significantly lower on Friday.
Market heavyweight SoftBank Group is gaining more than 1 percent, while Uniqlo operator Fast Retailing is adding almost 3 percent. Among automakers, Honda is edging up 0.5 percent, while Toyota is losing more than 1 percent. In the tech space, Advantest is gaining almost 3 percent, while Tokyo Electron and Screen Holdings are adding more than 1 percent each. In the banking sector, Sumitomo Mitsui Financial and Mitsubishi UFJ Financial are gaining almost 1 percent each, while Mizuho Financial is adding more than 1 percent.
The major exporters are mixed, with Panasonic edging down 0.1 percent, while Sony is gaining more than 1 percent, Mitsubishi Electric is edging up 0.4 percent and Canon is adding almost 1 percent.
Among the other major gainers, Kawasaki Kisen Kaisha is gaining 4.5 percent and Tokio Marine is adding more than 3 percent, while T&D Holdings, Dai-ichi Life Holdings and Minebea Mitsumi are up almost 3 percent. Conversely, Shinsei Bank is losing more than 2 percent.
In economic news, the value of core machine orders in Japan was up a seasonally adjusted 3.8 percent on month in October, the Cabinet Office said on Monday – coming in at 879.8 billion yen. That beat expectations for an increase of 2.1 percent following the flat reading in September. On a yearly basis, core machine orders rose 2.9 percent – shy of forecasts for a gain of 4.0 percent following the 12.5 percent jump in the previous month. For the fourth quarter of 2021, core machine orders are predicted to rise 3.1 percent both on quarter and on year. The total value of machinery orders received by 280 manufacturers operating in Japan increased 24.9 percent on month and 29.4 percent on year to 2,965.5 billion yen. Further, the Bank of Japan’s quarterly Tankan Survey of business sentiment showed on Monday that large manufacturing in Japan was stagnant in the fourth quarter of 2021, with a diffusion index score of +18. That missed forecasts for a reading of +19 and was unchanged from three months ago. The outlook came in at +13, missing expectations for +19 and down from +14 in the previous quarter.
In the currency market, the U.S. dollar is trading in the mid-113 yen-range on Monday.
Elsewhere in Asia, Hong Kong is gaining 1 percent, while New Zealand, China, Singapore, South Korea, Taiwan, Malaysia and Indonesia are higher by between 0.1 and 0.9 percent each. On Wall Street, stocks moved back to the upside during trading on Friday following the pullback seen in the previous session. The major averages fluctuated in morning trading but climbed more firmly into positive territory in the afternoon.
The major averages moved higher going into the close, with the Dow and the S&P 500 reaching new highs for the session. The Dow rose 216.30 points or 0.6 percent at 35,970.99, the Nasdaq climbed 113.23 points or 0.7 percent to 15,630.60 and the S&P 500 jumped 44.57 points or 1 percent to 4,712.02.
Meanwhile, the major European markets moved to the downside over the course of the session. While the U.K.’s FTSE 100 Index fell by 0.4 percent, the French CAC 40 Index and the German DAX Index edged down by 0.2 percent and 0.1 percent, respectively.
Crude oil futures settled higher Friday on easing worries about the Omicron coronavirus variant’s impact on global economic growth. West Texas Intermediate Crude oil futures for January ended higher by $0.73 or 1 percent at $71.67 a barrel. WTI crude futures gained 8.2 percent in the week, the best weekly returns since end August.