Asian stock markets are mostly lower on Tuesday despite the positive cues overnight from Wall Street, as crude oil prices tumbled more than 15 percent and extended losses from Monday.
Crude oil prices fell on Monday amid mounting fears that storage around the world could reach full capacity soon and production cuts may not be enough to offset the huge fall in demand amid the coronavirus pandemic.
The Australian market is extending gains from the previous session following the positive cues from Wall Street on improved investor sentiment as several U.S. states start to reopen their economies following coronavirus-related shutdowns. Expectations of additional stimulus from global central banks also lifted shares.
The benchmark S&P/ASX 200 Index is adding 26.00 points or 0.49 percent to 5,347.40, after rising to a high of 5,362.20 earlier. The broader All Ordinaries Index is advancing 25.50 points or 0.47 percent to 5,413.80. Australian stocks closed notably higher on Monday.
Among the big four banks, Westpac is gaining almost 4 percent, ANZ Banking is rising 2.0 percent and Commonwealth Bank is advancing more than 1 percent. National Australia Bank is losing almost 3 percent.
Westpac said it will incur a pre-tax impairment charge of A$2.24 billion in the first half of the year mainly due to the economic impact of COVID-19. The bank is slated to report its first-half results next week.
In the oil sector, Santos is lower by 2 percent and Woodside Petroleum is down 0.3 percent while Oil Search is adding 0.4 percent after crude oil futures tumbled almost 25 percent overnight.
In the mining space, BHP is advancing almost 1 percent, while Rio Tinto is lower by 0.3 percent and Fortescue Metals is edging down 0.1 percent.
Among gold miners, Newcrest Mining is losing more than 3 percent and Evolution Mining is lower by more than 1 percent after safe-haven gold prices extended losses overnight.
Wesfarmers said it has accelerated a review into its underperforming Target business following weak sales due to the coronavirus lockdown that could result in a likely earnings decline. Shares of the conglomerate, which will deliver its review by June 30, are adding 0.3 percent.
Lendlease Group said it is raising up to A$1.15 billion to bolster its balance sheet amid the market uncertainty due to the coronavirus crisis and has withdrawn the guidance provided along with its first-half results. The construction company’s shares are in a trading halt.
In the currency market, the Australian dollar is higher against the U.S. dollar on Tuesday. The local unit was quoted at $0.6465, compared to $0.6460 on Monday.
The Japanese market is declining following the strong gains in the previous session and despite the positive cues from Wall Street. Investors digested data that showed that Japan’s unemployment rate rose to a one-year high in March.
The benchmark Nikkei 225 Index is down 81.90 points or 0.41 percent to 19,701.32, after rising to a high of 19,841.78 in early trades. Japanese shares posted strong gains on Monday as the Bank of Japan expanded its monetary stimulus for the second straight month.
Market heavyweight SoftBank is declining almost 1 percent, while Fast Retailing is higher by almost 1 percent.
The major exporters are mostly lower despite a weaker yen. Mitsubishi Electric is lower by more than 1 percent, Canon is declining almost 1 percent and Sony is down 0.2 percent, while Panasonic is gaining more than 4 percent.
In the tech space, Advantest is up 0.2 percent, while Tokyo Electron is lower by 0.3 percent. Among automakers, Honda is declining more than 1 percent, while Toyota is adding 0.5 percent.
Among the worst performers, Kao Corp. is losing more than 4 percent, while FamilyMart Co., Kyocera Corp. and Seven & I Holdings are lower by almost 3 percent each.
In economic news, the Ministry of Communications and Internal Affairs said that the unemployment rate in Japan came in at a seasonally adjusted 2.5 percent in March. That was in line with expectations and up from 2.4 percent in February. The jobs-to-applicant ratio was 1.39, shy of expectations for 1.40, and down from 1.45 in the previous month.
In the currency market, the U.S. dollar is trading in the lower 107 yen-range on Tuesday.
Elsewhere in Asia, Shanghai, South Korea and Singapore are also declining, while Indonesia, Malaysia and Taiwan are edging lower. Meanwhile, New Zealand is gaining almost 3 percent and Hong Kong is edging higher.
On Wall Street, stocks closed sharply higher on Monday after New York Governor Andrew Cuomo announced plans for a phased reopening of his state’s economy. The announcement by Cuomo comes as other states, including several led by Republican governors, have already started reopening their economies. Buying interest was also generated amid optimism about additional stimulus ahead of Federal Reserve and European Central Bank meetings later this week.
The Dow jumped 358.51 points or 1.5 percent to 24,133.78, the Nasdaq advanced 95.64 points or 1.1 percent to 8,730.16 and the S&P 500 surged up 41.74 points or 1.5 percent to 2,878.48.
The major European markets also showed significant moves to the upside on Monday. The German DAX Index soared by 3.1 percent, the French CAC 40 Index surged up by 2.6 percent and the U.K.’s FTSE 100 Index advanced by 1.6 percent.
Crude oil prices tanked on Monday amid mounting fears that storage at Cushing, Oklahoma, could reach full capacity soon and that production cuts might not be enough to counter the huge fall in demand amid the coronavirus pandemic. WTI crude for June fell $4.16 or 24.6 percent at $12.78 a barrel. That was the second lowest settlement ever for a front-month contract.
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