Asia report: Markets mixed as investors look to Fed

Markets in Asia finished mixed on Tuesday, as traders closed their wallets ahead of the US Federal Reserve’s two-day monetary policy meeting where interest rates were widely expected to rise.

In Japan, the Nikkei 225 ended down 0.12% at 19,609.50, with technology firm Toshiba finishing the session in the green, adding 0.47%.

The beleaguered company reported during the session that it would move faster in investigating the possibility of selling a majority share in its loss-making US nuclear development business.

It also said it would reduce the number of directors it has, and tighten up its supervision and risk monitoring at constituent companies.

Toshiba had earlier confirmed it was postponing the filing of its earnings yet again as auditors needed more time to fully investigate its nuclear subsidiary.

Elsewhere on the Tokyo corporate front, machinery producer Tsugami rose 5.16% after it announced it would buy back up to two million of its shares - 3.32% of its total issued share capital.

The yen was weaker against the greenback, last losing 0.17% to JPY 115.08 per $1.

On the mainland, the Shanghai Composite was up 0.05% at 3,238.62, while the Shenzhen Composite was off 0.14% at 2,027.1.

Fresh economic data out of Beijing showed a positive picture of China’s economy, with industrial output up 6.3% in the first two months of the year, year-on-year, while fixed asset investment was 8.9% higher.

Private investment was 6.7% higher.

Retail sales growth missed market expectations, however, rising 9.5% year-on-year in January and February, against forecasts for a 10.5% improvement.

Goldman Sachs upgraded China’s stocks to ‘overweight’ on Monday, with analysts there saying a rising producer price index would lead to improved corporate revenues, and relieve some of the pressure on credit.

The report also said banks in the People’s Republic were looking at an improved credit outlook and loan pricing.

South Korea’s Kospi was up 0.76% at 2,133.78, as the country continued to be embroiled in political scandal surrounding the impeachment of President Park Geun-hye last week and the arrest of Samsung Group chief Jay Lee in the cash-for-influence corruption scandal.

Media reports revealed that Hyundai Engineering signed a €3.2bn deal with an Iranian investment fund at the weekend for a petrochemical project, which now needed Korean banks to agree to financing.

Hyundai Engineering shares finished down 0.41%.

Hong Kong’s Hang Seng Index lost 0.01% to 23,827.95.

Oil prices were slightly higher on during Asian trading, with Brent crude last up 0.81% at $51.77, and West Texas Intermediate adding 0.7% to $48.74 per barrel.

According to CME Group’s FedWatch, markets were anticipating a Fed rate hike this week at a likelihood of 93% during afternoon trading in Asia.

Investors would be cautious of any rates rise, looking for any clues as to how rapid the central bank was looking to tighten monetary policy.

“Solid US employment growth of 235,000 in February, a fall in unemployment and a slight rise in wages growth keep the Fed on track to raise interest rates again this coming Wednesday,” noted AMP Capital chief economist Shane Oliver.

“However, with US monetary policy a long way from being tight, future rate hikes likely to be gradual and US economic data likely to be solid we don't see it derailing the bull market in shares.”

Australia’s S&P/ASX 200 finished up 0.03% at 5,759.14, with a fresh reading of business conditions falling in February.

The National Australia Bank’s monthly survey of more than 400 firms showed a seven point fall in the business conditions index to +9 for the month, although all sectors excluding retail reported conditions improving.

In New Zealand, the S&P/NZX 50 was down 0.2% at 7,177.09, led lower by commercial developer Precinct Properties, which lost 2.6%.

The down under dollars were both weaker, with the Aussie last retreating 0.2% against the greenback to AUD 1.3234 and the Kiwi weakening 0.19% to NZD 1.4470 per $1.