Asian Markets Mostly Higher Ahead Of Powell Testimony

Asian stock markets are mostly higher on Wednesday amid cautious trades ahead of U.S. Federal Reserve Chairman Jerome Powell’s congressional testimony later in the day for clues about the outlook for interest rates. Powell is due to testify before the House Financial Services Committee on Wednesday and before the Senate Banking Committee on Thursday.

The Australian market is advancing despite the mixed cues from Wall Street ahead of Powell’s congressional testimony. Most of the sectors are higher, with tech stocks and banks among the major gainers.

The benchmark S&P/ASX 200 Index is adding 37.70 points or 0.57 percent to 6,703.40, after touching a high of 6,679.00 earlier. The broader All Ordinaries Index is rising 35.80 points or 0.54 percent to 6,701.50. Australian stocks finished marginally lower on Tuesday.

Among tech stocks, WiseTech Global is higher by more than 3 percent and Afterpay Touch is gaining more than 2 percent.

The big four banks – ANZ Banking, National Australia Bank, Westpac and Commonwealth Bank – are higher in a range of 0.8 percent to 1.0 percent.

In the oil sector, Santos and Oil Search are rising 0.7 percent each, while Woodside Petroleum is up 0.5 percent following a modest increase in crude oil prices.

Gold miners are also higher after gold prices rose overnight. Newcrest Mining is rising 0.5 percent and Evolution Mining is adding 0.3 percent.

Among the major miners, BHP Group is edging down 0.1 percent and Rio Tinto is declining 0.2 percent, while Fortescue Metals is rising 0.2 percent.

Retail Food Group confirmed it is in advanced talks with a Hong Kong-owned investment firm Soliton Capital Partners over a deal to reduce its debt by A$160 million. Shares of the troubled Gloria Jeans and Donut King franchisor are losing almost 7 percent.

In economic news, Australia will see July results for the consumer confidence index from Westpac today.

In the currency market, the Australian dollar is lower against the U.S dollar on Wednesday. The local currency was quoted at $0.6927, compared to $0.6952 on Tuesday.

The Japanese market is modestly lower in choppy trade ahead of Powell’s congressional testimony. Worries about rising Japan-South Korea trade tensions also weighed on the market.

The benchmark Nikkei 225 Index is declining 22.70 points or 0.11 percent to 21,542.45, after touching a high of 21,601.86 earlier. Japanese shares eked out small gains on Tuesday.

The major exporters are mixed despite a weaker yen. Sony is adding 0.5 percent and Canon is rising 0.4 percent, while Mitsubishi Electric is losing more than 1 percent and Panasonic is declining almost 1 percent.

Among tech stocks, Advantest is rising almost 2 percent and Tokyo Electron is up 0.4 percent.

Nintendo is reportedly exploring partially relocating the production of its Nintendo Switch video game console to Vietnam from China this summer amid the ongoing U.S.-China trade war. Shares of Nintendo are lower by more than 1 percent.

In the oil sector, Inpex is advancing almost 1 percent, while Japan Petroleum is lower by 0.5 percent.

Market heavyweight SoftBank is rising 0.4 percent and Fast Retailing is higher by 1 percent. In the auto space, Toyota Motor is declining 0.7 percent and Honda Motor is edging down 0.1 percent.

Mitsubishi Motors said that the company will invest in Indonesian ride-hailing giant Gojek along with trading house Mitsubishi Corp. However, shares of Mitsubishi Motors are declining more than 1 percent, while Mitsubishi Corp.’s shares are down 0.2 percent.

Among the other major gainers, Chiba Bank is rising more than 3 percent, while KDDI Corp. and Dena Co. are higher by almost 3 percent each.

On the flip side, Showa Denko is losing more than 3 percent, while Tosoh Corp. and Kuraray Co. are declining more than 2 percent each.

In economic news, the Bank of Japan said that producer prices in Japan were down 0.5 percent on month in June. That missed expectations for a monthly decline of 0.1 percent, which would have been unchanged from the May reading.

In the currency market, the U.S. dollar is trading in the upper 108 yen range on Wednesday.

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

On Wall Street, stocks closed mixed on Tuesday after coming under pressure early in the session. A notable drop by 3M weighed on the Dow after RBC Capital Markets downgraded its rating on the company’s stock to Sector Perform from Outperform. Overall trading activity was subdued, as traders looked ahead to Powell’s testimony, hoping for signs of a near-term interest rate cut.

The Nasdaq climbed 43.35 points or 0.5 percent to 8,141.73 and the S&P 500 inched up 3.68 points or 0.1 percent to 2,979.63, while the Dow ended the session down 22.65 points or 0.1 percent at 26,783.49.

The major European markets also moved to the downside on Tuesday. While the German DAX Index fell by 0.9 percent, the French CAC 40 Index and the U.K.’s FTSE 100 Index slipped by 0.3 percent and 0.2 percent, respectively.

Crude oil futures settled higher on Tuesday, with traders making cautious moves, weighing crude demand and supply prospects ahead of weekly inventory data. WTI crude for August ended up $0.17 or 0.3 percent at $57.83 a barrel.

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