Asia report: Markets mixed on quiet day as attention turns stateside

Markets in Asia finished mixed on Wednesday, with Wall Street gains overnight setting a solid start to the session, but anxiety over the results of the Federal Reserve meeting took over towards the end of the day.

It was a quiet day in the region, with markets in Japan, Hong Kong and South Korea all closed for public holiday.

Both Seoul and Hong Kong were closed for Buddha’s Birthday, with Tokyo traders set to enjoy the rest of the week off for the Golden Week celebrations.

The yen was weaker against the greenback, last retreating 0.21% to JPY 112.22 per $1.

On the mainland, the Shanghai Composite was off 0.25% at 3,135.84, while the smaller, technology focussed Shenzhen Composite ended down 0.27% at 1,901.75.

Attention was turned firmly across the Pacific at the US, where the Fed was expected to stand pat on interest rates after a two-day meeting which started on Tuesday.

Most commentators said the central bank would be looking to take a wait-and-see approach this round to see where the economy was placed, though some members could be gunning for a rise in June.

“The solid increase in first quarter employment costs will give the FOMC confidence that inflation remains on track to meet its medium term target of 2 percent per annum,” read a note from Commonwealth Bank.

“We expect the FOMC to leave policy unchanged tomorrow but increase the Funds rate in June.”

According to CME Group’s FedWatch, expectations for a May rate hike were sitting astoundingly low at just under 5% on Wednesday.

Another US event influencing Asian markets was Apple’s quarterly numbers, released after the closing bell on Tuesday in New York.

The technology giant beat earnings expectations, but revenue missed market consensus at $44.5bn as it sold fewer iPhones than it anticipated.

Apple’s Taiwan-based suppliers were marginally higher, with iPhone assembler Hon Hai Precision Industry - which trades as Foxconn - in the green by 0.5%.

It was joined by Catcher Technology, which added 0.81%, and Largan, which was 0.4% firmer, while Pegatron finished flat.

Taiwan’s Taiex benchmark finished 0.14% higher on Wednesday, at 9,955.33.

Oil prices were higher during Asian trade, with Brent crude last up 0.77% at $50.85 per barrel and West Texas Intermediate also rising 0.77% at $48.03.

Prices had taken a tumble overnight in the US, as reports of falling production from Russia and OPEC nations was overshadowed by rising production in the US, Canada and Libya.

They rebounded after estimates from the American Petroleum Institute suggested a 4.16 million barrel fall in inventories last week.

Australia’s S&P/ASX 200 lost 0.98% to finish at 5,892.30, as the weighty financials subindex dragged on the benchmark, joined in the red by a number of resources plays.

BHP Billiton was off 2.31%, after its rating outlook was shifted to positive from stable by Moody’s, which held its rating at A3.

“The change in outlook to positive reflects our expectation that BHP Billiton will continue to generate material earnings and solid free cash flow in the current environment,” said Moody’s senior credit officer Matthew Moore.

BHP was joined by Alacer Gold, Rio Tinto and Woodside Petroleum, which lost 3.35%, 0.95% and 0.5% respectively.

On the Australasian financial front, Australia and New Zealand Banking Group was still on the back foot after it reported lower-than-expected earnings of AUD 3.41bn in its first half on Tuesday.

Its shares were down 2.79% in Sydney on Wednesday.

In New Zealand, the benchmark’s seven day rally was broken as the S&P/NZX 50 lost 0.2% to 7,405.84.

Profit taking befell Air New Zealand, which lost 2.5% after a 6% rise in the last two days, following reports the airline had secured former Prime Minister John Key as a director from September.

Key had resigned as the government’s leader late last year, citing personal reasons, after eight years at Premier House.

The down under dollars were both weaker against the greenback, with the Aussie last off 0.84% at AUD 1.3381 and the Kiwi retreating 0.25% to NZD 1.4455 per $1.