Asia report: Markets mixed ahead of Fed rate hike

Markets in Asia were mixed on Wednesday, with investors once again exercising caution ahead of the Federal Reserve’s interest rate decision, which is widely expected to result in a rate hike.

Japan’s benchmark Nikkei 225 was almost flat, closing up 0.02% \\t 19,253.61.

The markets were wooed somewhat by a bid to legalise casinos in the island nation clearing another hurdle, with a parliamentary panel giving the proposal its approval during the day.

Members of the National Diet’s lower house already passed the bill on 6 December.

In manufacturing, the Bank of Japan’s Tankan survey suggested rising sentiment in the industry, with the index at +10 for the fourth quarter.

It was, however, expected to fall slightly to +8 in the coming three months.

The yen was relatively stronger against the greenback, last coming in 0.2% head at JPY 114.96 per $1.

On the mainland, the Shanghai Composite lost 0.45% to 3,140.80, with the Shenzhen Composite losing 0.81% to 1,959.86.

Markets in China have come under fresh pressure this week, with Beijing preparing to apply new regulations limiting the amount of stock insurers can buy.

US President-elect Donald Trump was also affecting sentiment, after his controversial comments over the politburo’s ‘One China’ policy.

South Korea’s Kospi finished up 0.04% at 2,036.87, while the Hang Seng Index added 0.04% at 22,456.62.

Oil prices were down during Asian trading, following on from losses stateside overnight after data from the American Petroleum Institute showed an unexpected uptick in inventories.

Brent crude was last down 1.55% at $54.87 per barrel, and West Texas Intermediate lost 1.67% to $52.11.

Ahead of the Federal Reserve decision, the CME Group’s 30-day Fed Fund futures, the markets are anticipating a 95.4% probability of a higher Federal Reserve rate.

“The market does not view the Fed as the 'Grinch that stole Christmas' but rather is seeing the rate hike as a sign of a healthy US economy,” noted OANDA senior trader Stephen Innes.

In Australia, the S&P/ASX 200 was 0.71% higher at 5,854.60, with all sectors gaining apart from energy and materials, which lost 0.07% and 0.19% respectively.

Gambling giant Tatts, which operates sports betting and lottery services on behalf of most state and territory governments, was up 8.45%.

A bidding war was emerging around the group, with a partnership of Macquarie and KKR offering AUD 7.3bn in a counter-offer to an earlier AUD 6.4bn offer from sports betting rival Tabcorp.

Tabcorp’s shares fell 0.86% as a result.

New Zealand’s S&P/NZX 50 fell 0.8% to 6,797.87, with broadcast media group Sky leading the market lower, losing 10.8%.

The broadcaster - unrelated to the British company of the same name - had slashed its 2017 earnings guidance, citing rising content costs and falling subscriber numbers.

It was already facing global scrutiny under a deal announced earlier in the year to merge with Vodafone’s New Zealand operation, but that was currently on hold until the country’s competition regulators rule on the merger on 23 February.

Both of the down under dollars were stronger, with the Aussie last up 0.19% at AUD 1.3309 against the greenback and the Kiwi strengthening 0.26% to NZD 1.3847 per $1.