WPL Woodside Petroleum Limited

By Chao Deng 

Markets in Asia were mostly lower Wednesday, after oil prices slid to two-month lows and investors stayed cautious before the Federal Reserve concludes a two-day policy meeting.

Hong Kong's Hang Seng Index was down 0.7%, and the Shanghai Composite lost 0.9%. Chinese energy shares fell in Hong Kong, with China Shenhua Energy Co. and China Petroleum & Chemical Corp. both down roughly 2.5%.

South Korea's Kospi was off 0.4%. Australia's S&P ASX 200 was down 0.2%, with energy shares on the benchmark 1% lower.

Santos Ltd. fell 3.4% and Woodside Petroleum Ltd. was 3.6% lower.

Meanwhile, Japan's Nikkei Stock Average was up 0.6%, amid expectations that the Bank of Japan will introduce more easing later in the week.

The Australian dollar fell more than 1% to as low as $0.7109 Wednesday after disappointing Australian inflation data boosted expectations that the central bank may cut interest rates at its meeting next week. The currency was last at $0.7171.

Third-quarter inflation rose 0.5% on-quarter, compared with a 0.7% increase expected by economists surveyed by The Wall Street Journal. Consumer prices rose 1.5% on-year. The market is pricing in about a 70% chance that the Reserve Bank of Australia will cut rates at its policy meeting next week, up from 25% Tuesday.

Shares in the region have been lackluster this week, before the Fed concludes its two-day policy meeting on Wednesday. Although the central bank is widely expected to leave benchmark interest rates unchanged near zero, investors will parse the Fed's post-meeting statement for clues about the path of its monetary policy.

"Markets are at a tipping point, hesitant of rallying further ahead of what the Fed and BOJ do," said Angus Nicholson, a market analyst at brokerage IG. "People don't want to put on big positions ahead of the two events."

Comments from the European Central Bank last week about possible easing in December sparked a rally across global equities, just before China's central bank cut interest rates late on Friday.

The MSCI Asia Pacific closed Tuesday just off its highest level since mid-August. The benchmark, up 9.7% month-to-date, is on track for its largest monthly percentage gain since April 2009.

Overnight, U.S. stocks mostly fell as oil prices slumped and investors await the outcome of the Fed's meeting.

The Japanese yen was last at Yen120.36, roughly flat compared with its close in Asia on Tuesday. The currency traded as strong as Yen120.14 against the dollar a day earlier, after news that a U.S. Navy ship sailed near artificial islands in the South China Sea claimed by China sent investors toward haven assets.

In Australia, shares of National Bank of Australia Ltd. were down 2.1%, after the firm unveiled a deal to sell control of its life-insurance business and plans to exit its U.K. business early next year. The firm also said its full year net profit rose 20% to 6.34 billion Australian dollars ($4.56 billion).

Shares of Alibaba Group Holding Ltd. jumped 4.1% in New York, after the Chinese e-commerce giant reported a net profit for its fiscal second quarter ended Sept. 30 of $3.57 billion, more than seven times what it reported a year earlier, thanks largely to a one-off gain of $2.93 billion from the revaluation of a stake in Alibaba Health Information Technology.

The company also sounded a positive note about the Chinese economy. Alibaba Executive Vice Chairman Joe Tsai said wage growth and considerable savings would empower consumers even as the world's No. 2 economy slows to its lowest rate of growth since 2009.

Brent crude oil was flat at $46.79 a barrel. U.S. oil prices fell 2.3% overnight, on expectations that U.S. crude stockpiles grew for the fifth straight week last week.

Gold was up 0.2% at $1,168.20 a troy ounce.

Gillian Wong and Robb M. Stewart contributed to this article.

Write to Chao Deng at Chao.Deng@wsj.com

(END) Dow Jones Newswires

October 28, 2015 02:35 ET (06:35 GMT)

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