Asian stock markets are in negative territory on Thursday following the overnight sell-off on Wall Street amid concerns about excessive stock valuations and as the Federal Reserve noted that the pace of the economic recovery in the U.S. has moderated in recent months.
In its first monetary policy decision of the New Year, the Fed left interest rates unchanged as widely expected and revealed it plans to maintain its asset purchase program at the current pace.
The Australian market is extending losses from the previous session.
The benchmark S&P/ASX 200 Index is losing 171.00 points or 2.52 percent to 6,609.60, off a low of 6,606.70. The broader All Ordinaries Index is lower by 181.00 points or 2.56 percent to 6,879.20.
Among the major miners, Fortescue Metals is falling more than 3 percent, Rio Tinto is losing 3 percent and BHP Group is declining almost 2 percent.
Fortescue Metals reported iron ore shipments in the second quarter that was unchanged from the year-ago period as COVID-19 restrictions limited exports, but maintained its full-year outlook for iron ore shipments.
The big four banks – ANZ Banking, Commonwealth Bank, National Australia Bank and Westpac – are lower in a range of 2.3 percent to 2.9 percent.
Oil stocks are weak even as crude oil prices rebounded overnight. Oil Search is tumbling almost 5 percent, Santos is lower by more than 3 percent and Woodside Petroleum is losing almost 3 percent.
In the tech space, Afterpay is falling almost 5 percent, WiseTech Global is tumbling more than 4 percent and Appen is declining more than 2 percent.
Gold miners are also lower after gold prices fell for a fifth straight session overnight. Newcrest Mining is declining almost 2 percent and Evolution Mining is down more than 1 percent.
In economic news, the Australian Bureau of Statistics said export prices in Australia were up 5.5 percent on quarter in the fourth quarter of 2020, beating forecasts for a decline of 1.3 percent following the 5.1 percent drop in the third quarter. Import prices sank 1.0 percent on quarter versus expectations for a fall of 2.4 percent after sinking 3.5 percent in the three months prior.
The Japanese market is also notably lower.
The benchmark Nikkei 225 Index is down 360.68 points or 1.26 percent to 28,274.53, after falling to a low of 27,975.85 in early trades.
Market heavyweight SoftBank Group is losing more than 3 percent and Fast Retailing is down almost 1 percent. In the tech space, Advantest is lower by almost 3 percent and Tokyo Electron is declining more than 2 percent.
The major exporters are notably lower despite a weaker yen. Panasonic is tumbling more than 3 percent, while Sony and Mitsubishi Electric are lower by more than 2 percent. Canon is down 0.4 percent.
In the banking sector, Sumitomo Mitsui Financial is adding 0.4 percent while Mitsubishi UFJ Financial is down 0.2 percent. Among automakers, Honda is declining almost 2 percent and Toyota is down more than 1 percent.
Shares of Nissan Motor are advancing more than 1 percent. The automaker said Wednesday all of its new vehicles in key markets such as Japan, China, the U.S. and Europe will be partly or fully electrified by the early 2030s as part of its efforts to achieve the goal of net zero emissions by 2050.
U.S. investment fund Apollo Global Management is set to buy Japanese materials producer Showa Denko’s aluminum business for over 50 billion yen, or $482 million, the Nikkei business daily reported. Shares of Showa Denko are rising more than 3 percent.
Among the other major gainers, Isetan Mitsukoshi is gaining more than 5 percent, Kawasaki Kisen Kaisha is rising almost 5 percent and Mitsubishi Motors is higher by more than 4 percent.
Conversely, Cyberagent is tumbling almost 9 percent, Asahi Group is losing more than 4 percent and Alps Alpine is down almost 4 percent.
In economic news, the Ministry of Economy, Trade and Industry said the value of retail sales in Japan was down 0.3 percent on year in December, coming in at 14.434 trillion yen. That beat expectations for a decline of 0.4 percent following the downwardly revised 0.6 percent increase in November.
In the currency market, the U.S. dollar is trading in the lower 104 yen-range on Thursday.
Elsewhere in Asia, Shanghai is losing more than 2 percent, while New Zealand is lower by almost 2 percent. South Korea, Singapore, Hong Kong and Taiwan are lower by more than 1 percent each, while Indonesia is modestly lower. Malaysia is closed for a holiday.
On Wall Street, stocks closed sharply lower on Wednesday as traders finally seemed to be paying attention to concerns about the impact of new, more contagious coronavirus strains along with uncertainty about the prospects for a new relief package. Traders were also worried about recent speculative trading by retail investors amid continued spikes by heavily shorted stocks like GameStop and AMC Entertainment. Stocks saw further downside in late-day trading following the Federal Reserve’s first monetary policy announcement of the New Year amid disappointment that the central bank did not provide additional clarity about the outlook for its bond purchases.
The Dow tumbled 633.87 points or 2.1 percent to 30,303.17, the Nasdaq plunged 355.47 points or 2.6 percent to 13,270.60 and the S&P 500 slumped 98.85 points or 2.6 percent to 3,750.77.
Meanwhile, the major European markets also moved sharply lower on Wednesday. While the German DAX Index plunged by 1.8 percent, the U.K.’s FTSE 100 Index and the French CAC 40 Index tumbled by 1.3 percent and1.2 percent, respectively.
Crude oil futures settled higher on Wednesday after official data showed a substantial drop in U.S. crude stockpiles in the week ended January 22. WTI crude for March rose $0.24 or about 0.5 percent to $52.85 a barrel.
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