Asian Markets Sink Amid Inflationary Risks

(RTTNews) - Asian stock markets are trading mostly lower on Friday, following the broadly negative cues from Wall Street overnight, as crude oil soars past $100 a barrel for the first time since May amid concerns of a prolonged war between the U.S. and Iran. Surging crude oil prices and treasury yields have added to concerns about inflation risks and the outlook for interest rates ahead of the US Fed's monetary policy meeting next week. Asian markets ended mostly lower on Thursday.

CME Group's FedWatch Tool is currently indicating a 72.4 percent chance that the Fed will raise rates by a quarter-point at the meeting, up from 49.4 percent chance last week.

Comments from the U.S. President Donald Trump that the war could drag on until November diminished expectations of Strait of Hormuz reopening. Energy market participants are also cautiously watching the developments of the Saudi-Houthi escalation.

The Australian stock market is trading sharply lower on Friday, extending the losses in the previous three sessions, following the broadly negative cues from Wall Street overnight. The benchmark S&P/ASX 200 is falling to near the 8,700 level, with weakness in mining and technology stocks partially offset by gains in financial and energy stocks.

The benchmark S&P/ASX 200 Index is losing 108.80 points or 1.23 percent to 8,710.60, after hitting a low of 8,699.80 earlier. The broader All Ordinaries Index is up 118.00 points or 1.31 percent to 8,890.30. Australian stocks closed significantly lower on Thursday.

Among major miners, Rio Tinto is losing more than 3 percent and BHP Group is declining more than 4 percent, while Fortescue and Mineral Resources are slipping more than 2 percent each.

Oil stocks are mostly higher. Woodside Energy and Origin Energy are edging up 0.4 to 0.5 percent each, while Santos is adding more than 1 percent and Beach energy is gaining almost 2 percent.

Among tech stocks, Afterpay and Square-owner Block and Xero are edging down 0.4 to 0.5 percent each, while WiseTech Global is declining almost 3 percent, Zip is sliding almost 5 percent and Appen is losing more than 3 percent.

Among the big four banks, Westpac and ANZ Banking are edging up 0.3 to 0.4 percent each, while National Australia Bank is gaining more than 1 percent. Commonwealth Bank is edging down 0.4 percent.

Gold miners are mostly lower. Northern Star Resources, Resolute Mining Genesis Minerals and Evolution Mining are all declining more than 4 percent each, while Newmont is losing more than 2 percent.

In the currency market, the Aussie dollar is trading at $0.716 on Friday.

The Japanese market is trading sharply lower on Friday, reversing the gains in the previous session, following the broadly negative cues from Wall Street overnight. The Nikkei 225 is falling below the 63,500 level, with weakness in index heavyweights, exporters and technology stocks partially offset by gains in automakers.

The benchmark Nikkei 225 Index closed the morning session at 63,469.39, down 1,801.56 points or 2.76 percent, after hitting a low of 63,208.63 earlier. Japanese shares ended modestly higher on Thursday.

Market heavyweight SoftBank Group is slipping more than 5 percent and Uniqlo operator Fast Retailing is losing more than 1 percent. Among automakers, Toyota is up almost 1 percent and Honda is also gaining almost 1 percent.

In the tech space, Advantest is tumbling almost 7 percent, Screen Holdings is sliding more than 6 percent and Tokyo Electron is losing more than 4 percent.

In the banking sector, Sumitomo Mitsui Financial, Mizuho Financial and Mitsubishi UFJ Financial are all flat.

Among the major exporters, Panasonic is losing almost 4 percent, Mitsubishi Electric is down more than 1 percent and Sony is edging down 0.3 percent. Canon is edging up 0.3 percent.

Among other major losers, Resonac Holdings is plunging almost 8 percent, while Kioxia Holdings is tumbling almost 7 percent, while Lasertec, Mitsui Kinzoku, Ibiden and Sumitomo Metal Mining are declining almost 6 percent each. Renesas Electronics, Sumco and Mitsubishi Materials are slipping almost 5 percent each, while Disco and Dowa Holdings are losing more than 4 percent each. Toppan Holdings is down almost 4 percent.

Conversely, Inpex and Sharp are gaining almost 3 percent each.

In economic news, producer prices in Japan were down 0.2 percent on month in August, the Bank of Japan said on Friday. That missed expectations for a flat reading following the upwardly revised 0.4 percent increase in July (originally 0.1 percent).

On a yearly basis, producer prices jumped 7.6 percent - exceeding expectations for an increase of 7.4 percent following the upwardly revised 7.7 percent jump in the previous month (originally 7.2 percent).

Export prices were up 0.6 percent on month and 11.1 percent on year, the bank said, while import prices dipped 1.0 percent on month and spiked 16.7 percent on year.

In the currency market, the U.S. dollar is trading in the lower 154 yen-range on Friday.

Elsewhere in Asia, China, Hong Kong, South Korea, Indonesia and Taiwan are lower by between 1.3 and 2.4 percent each. New Zealand, Singapore and Malaysia are down by between 0.3 and 0.7 percent each.

On Wall Street, stocks moved mostly lower during trading on Thursday, extending the downward move seen over the past several sessions. With the continued weakness, the Dow and S&P 500 dropped to their lowest closing levels in over a month.

The major averages all finished the day firmly in negative territory. The Dow fell 316.56 points or 0.6 percent to 52,064.10, the Nasdaq slid 171.62 points or 0.7 percent to 26,081.72 and the S&P 500 declined 44.66 points or 0.6 percent to 7,591.70.

The major European markets all also moved to the downside on the day. While the German DAX Index slid by 0.8 percent, the U.K.'s FTSE 100 Index and the French CAC 40 Index declined by 0.6 percent and 0.5 percent, respectively.

Crude oil prices skyrocketed on Thursday as supply disruption concerns increased following the recent U.S.-Iran re-escalation. West Texas Intermediate crude for October delivery was up $6.81 or 7.09 percent at $102.86 per barrel.