Asian Markets Mixed Amid Cautious Trades

Asian stock markets are mixed on Tuesday in cautious as scant details about the partial U.S.-China deal announced last week cast doubts over the durability of the deal. Investors also preferred to stay on the sidelines ahead of earnings results from the big U.S. banks this week.

U.S. President Donald Trump announced on Friday that the U.S. and China have reached a “very substantial phase one deal,” although reports suggest China wants another round of talks before signing the agreement.

The Australian market is edging higher after a weak start following the modest losses overnight on Wall Street. Gains by banks were offset by weakness in the mining and oil sectors.

The benchmark S&P/ASX 200 Index is adding 5.80 points or 0.09 percent to 6,648.40, after falling to a low of 6621.90 earlier. The broader All Ordinaries Index is up 4.00 points or 0.06 percent to 6,761.90. Australian stocks rose for a third straight session on Monday.

In the banking space, National Australia Bank, ANZ Banking and Westpac are higher in a range of 0.1 percent to 0.5 percent, while Commonwealth Bank is edging down 0.1 percent.

The Australian Prudential Regulation Authority or APRA said it was reviewing how much capital lenders must hold to support their subsidiaries and aims to finalize the changes after January 31 following the closing of a consultation period.

Among the major miners, Fortescue Metals is losing almost 3 percent, BHP Billiton is declining more than 1 percent and Rio Tinto is lower by almost 1 percent.

Gold miner Evolution Mining is lower by more than 1 percent and Newcrest Mining is losing 1 percent despite an increase in gold prices overnight.

Newcrest Mining said its board has approved the first stage of its project to expand its Cadia mine in NSW at an estimated capital cost of A$685 million.

Oil stocks are weak after crude oil prices lost almost 2 percent overnight. Woodside Petroleum and Santos are declining more than 1 percent, while Oil Search is down 0.1 percent.

In economic news, members of the Reserve Bank of Australia’s monetary policy board said that lower interest rates would be required for an extended period of time in order to achieve employment and inflation goals, minutes from the central bank’s October 1 meeting has revealed. The bank added that while most risks to global growth remain to the downside, inflation continues to be fairly subdued in most major economies.

In the currency market, the Australian dollar is unchanged against the U.S. dollar on Tuesday. The local currency was quoted at $0.6776, flat from Monday.

The Japanese market is notably higher as the market resumed trading after a long holiday weekend and played catch-up with the rally in other Asian markets the previous day.

The benchmark Nikkei 225 Index is adding 382.13 points or 1.75 percent to 22,181.00, after touching a high of 22,185.68 in early trades.

The major exporters are higher on a weaker yen. Panasonic and Mitsubishi Electric are rising more than 2 percent each, while Canon is advancing almost 2 percent and Sony is adding almost 1 percent.

In the tech space, Advantest is higher by 2 percent and Tokyo Electron is up more than 1 percent. Among auto stocks, Honda Motor is advancing more than 2 percent and Toyota Motor is adding more than 1 percent.

Market heavyweight SoftBank is rising more than 3 percent and Fast Retailing is adding more than 1 percent.

In the oil sector, Inpex is rising almost 2 percent and Japan Petroleum is adding 0.3 percent even as crude oil prices declined almost 2 percent overnight.

Among the other major gainers, Kawasaki Kisen Kaisha is gaining more than 7 percent, Mitsui OSK Lines is rising more than 5 percent and Fujikura is higher by 5 percent.
On the flip side, Cyberagent is losing almost 2 percent.

On the economic front, Japan will see August results for its tertiary industry index and final August figures for industrial production today.

In the currency market, the U.S. dollar is trading in the lower 108 yen-range on Tuesday.

Elsewhere in Asia, Shanghai, Hong Kong, Indonesia and Malaysia are lower, while South Korea, Singapore, New Zealand and Taiwan are modestly higher.

On Wall Street, stocks closed modestly lower on Monday in choppy trading amid light volume due to the Columbus Day holiday as well as on renewed uncertainty about a trade deal with China. President Donald Trump announced on Friday that the U.S. and China have reached a “very substantial phase one deal,” although reports suggest China wants another round of talks before signing the agreement.

A person familiar with the matter told Bloomberg News that China may send a delegation led by Vice Premier Liu He to finalize a written deal that could be signed at the Asia-Pacific Economic Cooperation summit next month in Chile.

The Dow dipped 29.23 points or 0.1 percent to 26,787.36, the Nasdaq edged down 8.39 points or 0.1 percent to 8,048.65 and the S&P 500 slipped 4.12 points or 0.1 percent to 2,966.15.

The major European markets also moved to the downside on Monday. While the German DAX Index dipped by 0.2 percent, the French CAC 40 Index and the U.K.’s FTSE 100 Index fell by 0.4 percent and 0.5 percent, respectively.

Crude oil futures drifted lower on Monday as weak data out of China and fading optimism about U.S.-China trade deal raised concerns about the outlook for energy demand. WTI crude for November declined $1.11, or about 2 percent, to close at $53.59 a barrel.

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