Asia report: Markets mixed as investors eye Fed rates decision

Bourses in Japan were closed for a public holiday, as the yen strengthened 0.36% against the dollar to last trade at JPY 106.49.

On the mainland, the Shanghai Composite was up 0.44% at 2,822.44, and the smaller, technology-centric Shenzhen Composite slipped 0.1% 5o 1,730.74.

South Korea’s Kospi was 0.7% firmer at 1,947.56, while the Hang Seng Index in Hong Kong managed gains of 0.28% to 24,643.59.

The blue-chip technology stocks were mixed in Seoul, with chipmaker SK Hynix rising 0.36% as Samsung Electronics lost 0.2%.

Samsung posted its first quarter figures during the session, with profit coming in at KRW 4.9trn, which was still below market expectations - Refinitiv had pencilled in profits of KRW 5.1 trn.

The electronics giant warned investors that earnings in the second quarter were likely to fall, with the coronavirus crisis hampering demand for its products.

Standard Chartered, meanwhile, saw its Hong Kong shares close up 6.17% after it reported a 12% fall in first quarter profit before tax.

The emerging markets-focussed bank did say that it was “well prepared for a protracted period of severe dislocation”, however.

Investors were very much looking stateside late in the Asian session, ahead of the Fed’s interest rate decision, due later in the global day.

Market watchers were not expecting any major action from the US central bank, given it had already slashed interest rates, opened up lending facilities and seriously increased its quantitative easing programme in the face of the Covid-19 pandemic.

Rather, they were looking for an assessment on the effectiveness of those policies from the Fed, as many states in the US looked to ease economic and social restrictions.

“The chances are we won’t see fireworks from the FOMC meeting today,” said Swissquote Bank senior analyst Ipek Ozkardeskaya.

“The Fed will likely sit on its hands, as it has already slashed interest rates to near zero levels, and done all it could to maintain a smooth liquidity in the short-term money markets.

“And it seems like it has been working smoothly so far.”

Oil prices were rocketing at the end of the Asian day, with Brent crude last up 5.47% at $21.58 per barrel, and West Texas Intermediate ahead 12.89% at $13.93.

In Australia, the S&P/ASX 200 grew by 1.51% to finish its trading day at 1.51%, as the country’s big four banking stocks all advanced.

Australia and New Zealand Banking Group was up 6.11%, Commonwealth Bank of Australia added 4.2%, National Australia Bank was ahead 6.33%, and Westpac Banking Corporation gained 5.16%.

Across the Tasman Sea, New Zealand’s S&P/NZX 50 slipped 0.87% to 10,666.19, led lower by medical equipment manufacturer Fisher & Paykel Healthcare, which was off 4.3%.

The company, which counts respirators among its products, had seen a surge in demand amid the coronavirus outbreak, but investors were now likely beginning to question how long that could be sustained.

Both of the down under dollars were stronger on the greenback, with the Aussie last ahead 0.31% at AUD 1.5359, and the Kiwi advancing 0.36% to NZD 1.6448.