CANBERA (dpa-AFX) - Asian stock markets are a sea of red on Wednesday, following the broadly negative cues from Wall Street overnight, dragged by the benchmark indexes in Japan and South Korea which are plunging 4 to 5 percent each on concerns over stretched valuations as global tech stocks tumble on fears that an AI bubble is about to burst. Asian markets closed mostly lower on Tuesday.
The weakness in the markets also came as Goldman Sachs CEO David Solomon warned of a significant correction by the equity markets over the next 1 to 2 years.
As the ongoing US government shutdown in day 35 has indefinitely postponed the release of key US data, the US Fed and the markets are now left to pore over only private data to get clues on the economy.
Payroll processor ADP is scheduled to release its report on private sector employment, which could shed light on the strength of the labor market amid uncertainty about the outlook for interest rates.
The Fed has instituted two rate-cuts this year. Fed officials are divided on another rate cut at their upcoming December 9-10 meeting. Expectations of another U.S. Federal Reserve rate cut are fading away amid divergent comments from Fed officials.
On Friday, Kansas City Fed President Jeff Schmid had stated that as he felt inflation was too high, he did not favor a rate cut.
CME Group's FedWatch Tool is currently indicating a 70.1% chance of a 25-basis-point interest rate cut at the Federal Reserve's meeting coming up on December 9-10.
Australian shares are trading notably lower on Wednesday, adding to the losses in the previous session, with the benchmark S&P/ASX 200 falling well below the 8,800 level, following the broadly negative cues from Wall Street overnight, dragged by tumbling mining, energy and technology stocks.
The benchmark S&P/ASX 200 Index is losing 38.70 points or 0.44 percent to 8,775.00, after hitting a low of 8,733.80 earlier. The broader All Ordinaries Index is down 60.30 points or 0.66 percent to 9,037.90. Australian stocks ended significantly lower on Tuesday.
Among major miners, BHP Group is losing more than 1 percent and Rio Tinto is declining more than 2 percent, while Mineral Resources and Fortescue are tumbling almost 4 percent each.
Oil stocks are mostly lower. Santos is losing almost 1 percent and Beach energy is declining more than 2 percent, while Origin Energy is edging up 0.2 percent. Woodside Energy is flat.
In the tech space, Afterpay owner Block is losing more than 2 percent, Zip is slipping more than 4 percent and Appen is sliding more than 5 percent, while Xero and WiseTech Global are declining almost 2 percent each.
Among the big four banks, Westpac and ANZ Banking are edging down 0.1 percent each, while National Australia bank is gaining almost 1 percent and Commonwealth Bank is adding more than 1 percent.
Among gold miners, Evolution Mining is declining more than 2 percent, Newmont is down more than 1 percent, Northern Star Resources is slipping almost 2 percent, Genesis Minerals is losing more than 3 percent and Resolute Mining is tumbling more than 7 percent after acknowledging that the situation in Mali 'continues to be unpredictable.' The Syama gold mine in Mali is one of Resolute's key assets.
In economic news, the service sector in Australia continued to expand in October, and at a slightly faster rate, the latest survey from S&P Global revealed on Wednesday with a PMI score of 52.5. That's up marginally from 52.4 in September, and it moves further above the boom-or-bust line of 50 that separates expansion from contraction.
In the currency market, the Aussie dollar is trading at $0.648 on Wednesday.
The Japanese stock market is trading sharply lower on Wednesday, extending the losses in the previous four sessions, following the broadly negative cues from Wall Street overnight. The Nikkei 225 is tumbling 4.7 percent to the 49,100 level, with weakness across most sectors led by index heavyweights and technology stocks.
The benchmark Nikkei 225 Index closed the morning session at 49,104.05, down 2,393.15 points or 4.65 percent, after hitting a low of 49,073.58 earlier. Japanese stocks ended notably lower on Tuesday.
Market heavyweight SoftBank Group is tumbling almost 14 percent, while Uniqlo operator Fast Retailing is gaining almost 2 percent. Among automakers, Honda is losing more than 2 percent and Toyota is declining almost 4 percent.
In the tech space, Advantest is tumbling almost 10 percent, Screen Holdings is losing almost 4 percent and Tokyo Electron is declining almost 6 percent.
In the banking sector, Sumitomo Mitsui Financial is losing 3.5 percent, Mitsubishi UFJ Financial is slipping almost 4 percent and Mizuho Financial is declining more than 5 percent.
Among the major exporters, Mitsubishi Electric is declining almost 5 percent, Panasonic is losing 4.5 percent, Canon is down more than 1 percent and Sony is slipping more than 2 percent.
Among other major losers, Hitachi Construction Machinery is plummeting more than 10 percent and Socionext is plunging more than 9 percent, while Disco, Furukawa Electric and Mitsui Kinzoku are tumbling more than 7 percent each. Japan Steel Works and Fujikura are sliding more than 6 percent each. Sumco is sliding almost 6 percent, while Taiyo Yuden, Yaskawa Electric, Renesas Electronics and Lasertec are declining more than 5 percent each. Resonac Holdings is down almost 5 percent.
Conversely, NSK and NH Foods are soaring almost 12 percent each, while Nintendo is surging more than 7 percent. Toyota Tsusho is gaining almost 5 percent, while Hino Motors, Yamaha, Nomura Research Institute and Nidec are adding more than 3 percent each. Central Japan Railway, Japan Airlines and Nitori Holdings are up almost 3 percent each.
In economic news, members of the Bank of Japan's Monetary Policy Meeting agreed that the country was continuing to see economic recovery, although some downside risks remain, minutes from the central bank's monetary policy meeting on September 17-18 revealed on Wednesday.
At the meeting, the Japanese central bank left its key interest rate unchanged at 0.5 percent, as expected, but surprised markets with a decision to reduce the holdings of its massive stock of exchange-traded funds, suggesting that the monetary policy normalization is underway.
Meanwhile, the monetary base in Japan tumbled 7.9 percent on year in October, the Bank of Japan said on Wednesday - coming in at 616.598 trillion yen. That was well shy of expectations for a decline of 4.8 percent following the 6.1 percent drop in September. The adjusted monetary base was down an annual 17.9 percent at 618.463 trillion yen.
Banknotes in circulation fell 2.3 percent on year, while coins in circulation slipped 1.4 percent. Current account balances stumbled 9.1 percent on year, including a 7.6 percent drop in reserve balances.
In the currency market, the U.S. dollar is trading in the lower 153 yen-range on Wednesday.
Elsewhere in Asia, South Korea and Taiwan are tumbling 4.4 and 2.3 percent, respectively. New Zealand, China, Hong Kong, Singapore Malaysia, Indonesia are lower by between 0.1 and 1.3 percent each.
On the Wall Street, stocks staged a recovery attempt an early slump on Tuesday but showed a notable move back to the downside over the course of the trading session. The major averages all moved lower on the day following the mixed performance seen during trading on Monday.
The tech-heavy Nasdaq posted a particularly steep loss on the day, plunging 486.09 points or 2.0 percent to 23,348.64. The S&P 500 also slumped 80.42 points or 1.2 percent to 6,771.55, while the narrower Dow slid 251.44 points or 0.5 percent to 47,085.24.
Meanwhile, the major European markets turned in a mixed performance on the day. The German DAX Index declined by 0.8 percent and the French CAC 40 Index slid 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 declined sharply on Tuesday due to excess supply concerns. West Texas Intermediate crude for December delivery was down $0.44 or 0.72 percent at $60.61 per barrel.
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