Asia report: Markets mixed as investors look to Fed
Stock markets in Asia closed in a mixed state on Monday, as investors kept a hold on their wallets ahead of the US Federal Reserve’s policy meeting later in the week.
In Japan, the Nikkei 225 was up 0.24% at 27,588.37, as the yen weakened 0.04% against the dollar to last trade at JPY 113.73.
Technology conglomerate SoftBank Group slid 2.41%, while among the benchmark’s other major components, automation specialist Fanuc rose 0.15%, and fashion firm Fast Retailing was ahead 1.17%.
The broader Topix index was 0.14% firmer by the end of trading in Tokyo, closing at 1,929.87.
On the mainland, the Shanghai Composite eked out gains of 0.04% to 3,524.10, and the smaller, technology-heavy Shenzhen Composite added 0.19% to 2,392.24.
Naeem Aslam, chief market analyst at AvaTrade, noted that the People’s Bank of China was trying to stimulate the economy by reducing interest rates for the first time since 2020, and adopting policies to encourage banks to speed up lending.
“These steps are being taken to give a boost to the second-largest economy in the world after its economic growth slowed down because of the real estate debacle in 2021 and recurring coronavirus outbreaks,” he said.
South Korea’s Kospi lost 1.29% to 2,792.00, while the Hang Seng Index in Hong Kong slid 1.24% to 24,656.46.
The blue-chip technology stocks were mixed in Seoul, with Samsung Electronics down 0.66%, while SK Hynix closed flat.
Investors were looking ahead to the Federal Open Market Committee’s meeting in the United States later in the week, with policymakers due to decide the central bank’s next steps on Tuesday and Wednesday.
“The Federal Reserve meeting later this week is expected to confirm the fears which investors have been harbouring so far this year, namely that apart from an acceleration of tapering, interest rate cards are also likely to pepper the remainder of 2022,” said Interactive Investor head of markets Richard Hunter.
“The current consensus is for an initial hike in March, followed by a further two or three rises which could take the rate to 1% by year end.
“While the moves are increasingly necessary given relatively rampant inflation, they also bring the likelihood of dampening earnings prospects.”
Oil prices were lower at the end of the Asian day, with Brent crude last down 0.03% at $87.86 per barrel, and West Texas Intermediate losing 0.15% to $85.01.
In Australia, the S&P/ASX 200 was 0.51% weaker at 7,139.50, with banks, miners and energy plays all on the back foot in Sydney.
The financials subindex was down 0.59%, while the materials sector lost 1.15% and energy was behind by 0.53%.
Across the Tasman Sea, the S&P/NZX 50 was down 1.27% at 12,191.06, after the country reentered more severe Covid-19 restrictions on a national scale over the weekend, amid a number of new Omicron infections.
The down under dollars were both weaker against the greenback, with the Aussie last off 0.59% at AUD 1.4006, and the Kiwi retreating 0.25% to NZD 1.4933.