Caution Reigns in Asia Markets Ahead of BOJ, Fed Meetings
April 26 2016 - 12:20AM
Dow Jones News
Stock markets across Asia were generally lower Tuesday as
investors stayed cautious ahead of central-bank meetings this week
in Japan and the U.S.
Japan's Nikkei Stock Average was down 1%, Korea's Kospi was
little changed and Australia's S&P/ASX 200 was down 0.3%.
In China, the Shanghai Composite Index was about flat, while
Hong Kong's Hang Seng Index fell 0.6%.
Traders said uncertainty about monetary policies weighed on
stock markets.
"People are either taking bets off the table or reluctant to
position themselves" before this week's meetings, said Alex Furber,
senior client services executive for CMC Markets in Singapore.
Stocks in Japan were falling as the yen strengthened slightly
against the U.S. dollar. Analysts expect Bank of Japan officials,
who will gather Wednesday for a two-day meeting, to unveil
further easing measures in a bid to boost the stagnant economy,
generate some inflation and weaken the yen. A weaker currency helps
Japanese exporters sell their goods at more competitive prices
abroad.
Financials shares led Japan's stock market lower. Sumitomo
Mitsui Financial Group fell 3.7% and casualty insurer Sompo Japan
Nipponkoa Holdings lost 2.3%.
Malaysia's benchmark stock index slipped after state investment
fund 1MDB said it defaulted on a $1.75 billion bond issue, which
triggered cross-defaults on two other Islamic notes totaling 7.4
billion ringgit. The FTSE Bursa Malaysia KLCI was recently down
0.5%.
In Korea, shares were mixed after preliminary data from the Bank
of Korea showed that the economy in the first quarter grew 2.7%
from a year earlier, better than expected. The economy slowed from
the previous quarter, weighed by sluggish exports and weak consumer
sentiment.
Investors are also awaiting results of the Federal Reserve's
two-day policy meeting, which begins Tuesday after markets close in
Asia. An interest-rate increase is unlikely, though officials' view
of the economy could offer clues about whether rates may move in
June.
In commodities, volatility in oil prices is weighing on shares
of major oil producers. Australia's BHP Billiton was down 2.1%,
while Rio Tinto fell 2.7%.
Brent crude-oil prices recouped some losses in the Asia morning
after worries about rising oil supplies in the U.S. sparked a
selloff overnight. Brent crude was recently trading up 35 U.S.
cents at $44.83 per barrel.
Write to Dominique Fong at Dominique.Fong@wsj.com
(END) Dow Jones Newswires
April 26, 2016 00:05 ET (04:05 GMT)
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