Asian Markets Mostly Lower



Asian stock markets are mostly lower on Monday despite the U.S. and China announcing on Friday that they have reached a phase one trade deal. Investors are cautious as they awaited further details of the partial trade pact and shrugged off data that showed China's industrial production as well as retail sales rose more than expected in November.


U.S. Trade Representative Robert Lighthizer said on Sunday that the phase one U.S.-China trade deal is "totally done" and will nearly double U.S. exports to China over the next two years.


The Australian market is advancing after the U.S. and China said they reached a long-awaited agreement on a phase one trade deal. Hopes of an interest rate cut by the Reserve Bank of Australia also lifted stocks.


The benchmark S&P/ASX 200 Index is adding 69.60 points or 1.03 percent to 6,809.30 and the broader All Ordinaries Index is rising 67.20 points or 0.98 percent to 6,911.80. Australian stocks closed higher on Friday.


The major miners are higher. BHP is advancing more than 1 percent, Fortescue Metals is higher by almost 1 percent and Rio Tinto is adding 0.7 percent.


Gold miners are also gaining after gold prices rose on Friday. Newcrest Mining is advancing almost 2 percent and Evolution Mining is higher by almost 1 percent.


Among the big four banks, ANZ Banking, Commonwealth Bank and Westpac are rising more than 1 percent each, while National Australia Bank is up almost 1 percent.


Oil stocks are advancing after crude oil prices rose more than 1 percent Friday. Santos is rising more than 1 percent, Woodside Petroleum is higher by almost 1 percent and Oil Search is adding 0.3 percent.


In the currency market, the Australian dollar is lower against the U.S. dollar on Monday. The local currency was quoted at $0.6876, down from $0.6924 on Friday.


The Japanese market is modestly lower despite U.S. and Chinese officials saying they have reached an agreement on a phase one trade deal.


Investors resorted to profit-taking after strong gains in the previous session and as they digested data that showed the manufacturing sector in Japan continued to contract in December.


The benchmark Nikkei 225 Index is down 43.65 points or 0.18 percent to 23,979.45, after touching a low of 23,950.05 in early trades. Japanese shares surged to a fourteen-month high on Friday.

Market heavyweight SoftBank Group Corp. is advancing almost 1 percent, while Fast Retailing is down 0.6 percent.


The major exporters are mixed on a stronger yen. Panasonic is declining almost 1 percent, Mitsubishi Electric is down 0.6 percent, while Sony is adding 0.4 percent and Canon is rising 0.2 percent.


Among auto stocks, Toyota Motor is declining 0.4 percent and Honda Motor is lower by 0.2 percent. In the oil sector, Inpex and Japan Petroleum are losing more than 1 percent each.

In the tech space, Advantest is rising more than 1 percent, while Tokyo Electron is down 0.3 percent.


Among the other major gainers, Nippon Suisan Kaisha is rising more than 4 percent, while Shiseido Co. and M3 are higher by more than 2 percent each.


On the flip side, Sumitomo Dainippon Pharma and Astellas Pharma are losing more than 2 percent each.


On the economic front, the latest survey from Nikkei revealed that the manufacturing sector in Japan continued to contract in December, and at a slightly faster rate, with a preliminary PMI score of 48.8. That's down marginally from 48.9 in November and it moves further beneath the boom-or-bust line of 50 that separates expansion from contraction.


The services index from Jibun Bank came in with a score of 50.6, up from 50.3 in the previous month. The composite had a score of 49.8, unchanged from the November reading.


In the currency market, the U.S. dollar is trading in the lower 109 yen-range on Monday.

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

On Wall Street, stocks closed roughly flat on Friday in choppy trading even though U.S. and Chinese officials announced a long-awaited agreement on a phase one trade deal.


The announcement of the agreement comes just two days before a new 15 percent tariff on approximately $160 billion worth of Chinese goods was set to be imposed. Traders breathed a sigh of relief but seemed reluctant to make more significant moves amid a lack of clarity about the details of the agreement.


While the tech-heavy Nasdaq rose 17.56 points or 0.2 percent to a new record closing high of 8,734.88, the Dow inched up 3.33 points or less than a tenth of a percent to 28,135.38 and the S&P 500 crept up 0.23 points or less than a tenth of a percent to 3,168.80.


The major European markets also moved to the upside on Friday. While the U.K.'s FTSE 100 Index jumped by 1.1 percent, the French CAC 40 Index and the German DAX Index climbed by 0.6 percent and 0.5 percent, respectively.


Crude oil prices moved higher on Friday, as worries about the outlook for energy demand subsided a bit on reports the U.S. and China have agreed on text of a phase one trade deal. WTI crude for January ended up $0.89 or about 1.5 percent at $60.07 a barrel, the highest settlement since mid-September.




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