Asian Markets Track Wall Street Lower

(RTTNews) - Asian stock markets are trading mostly lower on Wednesday, following the broadly negative cues from Wall Street overnight, amid concerns about the re-escalation in the Middle East and the related spike in crude oil prices that would translate to higher inflation and could keep interest rates elevated. Asian markets closed mostly lower on Tuesday.

This followed reports of projectile attacks by Iran on at least three tankers sailing through the Strait of Hormuz. The U.S. has now launched fresh air strikes in Iran and revoked a waiver that had allowed the country to sell oil globally.

The latest escalation in geopolitical tensions added another layer of uncertainty in financial markets and put the interim U.S.-Iran peace agreement at risk. Currently, the U.S.-Iran negotiations are halted owing to the multi-day funeral of Iran's late Supreme Leader Ayatollah Ali Khamenei until Thursday when the burial would complete.

Australian shares are trading significantly lower on Wednesday, extending the losses in the previous two sessions, following the broadly negative cues from Wall Street overnight. The benchmark S&P/ASX 200 falling well below the 8,750 level, with weakness across most sectors led by gold miners and technology stocks. Energy stocks were the only bright spot.

The benchmark S&P/ASX 200 Index is losing 85.80 points or 0.98 percent to 8,718.10, after hitting a low of 8,676.70 earlier. The broader All Ordinaries Index is down 92.60 points or 1.03 percent to 8,912.10. Australian stocks ended modestly lower on Tuesday.

Among major miners, BHP Group is losing almost 3 percent and Fortescue is slipping almost 1 percent, while Mineral Resources and Rio Tinto are down more than 2 percent each.

Oil stocks are mostly higher. Woodside Energy is advancing almost 4 percent, Origin Energy is gaining more than 1 percent, Santos is surging more than 5 percent and Beach energy is adding more than 3 percent.

In the tech space, Afterpay owner Block and Xero are down almost 1 percent each, while Zip is losing more than 2 percent, WiseTech Global is slipping more than 3 percent and Appen is declining almost 2 percent.

Among the big four banks, Westpac is declining almost 2 percent and National Australia bank is losing more than 1 percent, while ANZ Banking and Commonwealth Bank are down almost 1 percent each.

Among gold miners, Evolution Mining and Resolute Mining are losing more than 4 percent each, while Genesis Minerals is sliding almost 5 percent, Northern Star Resources is slipping almost 3 percent and Newmont is down more than 2 percent.

In the currency market, the Aussie dollar is trading at $0.693 on Wednesday.

The Japanese stock market is trading notably lower on Wednesday, extending the losses in the previous two sessions, following the broadly negative cues from Wall Street overnight. The Nikkei 225 is falling well below the 67,800 mark, with weakness in automaker stocks and a mixed performance across most other sectors.

The benchmark Nikkei 225 Index closed the morning session at 67,758.64, down 498.32 points or 0.73 percent, after hitting a low of 67,122.49 earlier. Japanese stocks ended sharply lower on Tuesday.

Market heavyweight SoftBank Group is gaining almost 1 percent, while Uniqlo operator Fast Retailing is losing almost 1 percent. Among automakers, Honda is declining almost 3 percent and Toyota is losing almost 2 percent.

In the tech space, Advantest is edging up 0.3 percent, while Tokyo Electron and Screen Holdings are losing more than 1 percent each.

In the banking sector, Mizuho Financial and Sumitomo Mitsui Financial are edging up 0.2 to 0.3 percent each, while Mitsubishi UFJ Financial is losing almost 1 percent.

Among the major exporters, Mitsubishi Electric is losing more than 1 percent, while Canon and Sony are edging down 0.2 to 0.4 percent each. Panasonic is advancing almost 1 percent.

Among other major losers, IHI and Taisei are declining more than 4 percent each, while Kawasaki Heavy Industries, Renesas Electronics and Kajima are losing almost 4 percent each. Mitsubishi Heavy Industries, Ebara, Hitachi, Fanuc, Furukawa Electric, Toto, Yokohama Rubber, Suzuki Motor and Shimizu are slipping more than 3 percent each, while Disco is losing almost 3 percent.

Conversely, Takashimaya is gaining more than 3 percent and J. Front Retailing is adding almost 3 percent.

In economic news, the value of overall bank lending in Japan was up 5.7 percent on year in June, the Bank of Japan said on Wednesday - coming in at 676.138 trillion yen. That missed forecasts for an of a 5.8 growth percent and was unchanged from the May reading.

Excluding trusts, lending jumped 6.3 percent on year to 596.463 trillion yen, while lending from trusts rose 1.7 percent for the second straight month to 7.328 trillion yen. Lending from foreign banks surged 27.9 percent on year to 7.328 trillion yen.

Meanwhile, Japan posted a current account surplus of $3.968 trillion yen in May, the Ministry of Finance said on Wednesday. That missed expectations for a surplus of 4.121 trillion yen and was up from 3.908 trillion yen in April.

Exports were up 14.7 percent on year at 9.360 trillion yen and imports rose an annual 8.1 percent to 9.353 trillion yen for a trade surplus of 6.9 billion yen. The capital account saw a deficit of 15.5 billion yen, while the financial account had a surplus of 5.086 trillion yen.

In the currency market, the U.S. dollar is trading in the lower 162 yen-range on Wednesday.

Elsewhere in Asia, South Korea and Indonesia are down 2.6 and 1.4 percent, respectively. New Zealand, China and Taiwan are lower by between 0.1 to 0.7 percent each. Hong Kong is up 1.9 percent, while Singapore and Malaysia are up 0.4 and 0.1 percent, respectively.

On the Wall Street, stocks staged a recovery attempt in mid-day trading on Tuesday but moved back to the downside as the day progressed after coming under pressure early in the session. The major averages all finished the day in negative territory, with the tech-heavy Nasdaq showing a notable decline.

The Nasdaq tumbled 302.47 points or 1.2 percent to 25,818.69, the S&P 500 fell 33.58 points or 0.5 percent to 7,503.85 and the Dow dipped 130.76 points or 0.3 percent to 52,925.15. The major European markets all also moved to the downside on the day. The German DAX Index slumped by 1.4 percent and the French CAC 40 Index fell by 0.5 percent, although the U.K.'s FTSE 100 Index bucked the downtrend and inched up by 0.1 percent.

Crude oil prices spiked on Tuesday as concerns of fresh U.S.-Iran conflicts surfaced after attacks on at least three tankers in the Strait of Hormuz. West Texas Intermediate crude for August delivery was up $2.01 or 2.93 percent at $70.56 per barrel.