Asian shares slip after OECD cuts global outlook
A man walks past the stock price monitor at a private securities company Tuesday, Nov. 19, 2013, in Shanghai, China. Asian markets mostly fell on Wednesday after the OECD cut its forecasts for global growth, citing the likely effect of any winding down in the Federal Reserve’s huge stimulus program. AP Photo
HONG KONG—Asian markets mostly fell on Wednesday after the OECD cut its forecasts for global growth, citing the likely effect of any winding down in the Federal Reserve’s huge stimulus program.
Tokyo fell 0.33 percent, or 50.48 points, to 15,076.08, Sydney lost 0.84 percent, or 45.2 points, to end at a five-week low of 5,307.7, and Seoul fell 0.71 percent, or 14.40 points, to 2,017.24.
But Shanghai rose 0.62 percent, or 13.49 points, to 2,206.61 after China on Friday unveiled a blueprint for economic reform that includes a greater role for private firms and a relaxation of investment rules. Hong Kong added 0.18 percent, or 43.05 points to 23,700.86.
For investors in much of Asia, the negative impact of the Organisation for Economic Cooperation and Development report outweighed more positive comments from Fed chief Ben Bernanke.
In a prepared speech Tuesday, Bernanke said the US central bank would keep its easy money policy in place for as long as the economy needs to get back on track.
On currency markets the dollar hovered just above the 100 yen mark as traders await the release of minutes from the Fed’s last meeting.
The greenback bought 100.05 yen, compared with 100.13 yen in New York Tuesday, while the euro fetched $1.3531 and 135.40 yen, against $1.3535 and 135.53 yen.
Kengo Suzuki, forex strategist at Mizuho Securities, said Bernanke’s comments “were initially perceived as doveish, leading to broad dollar-selling”.
But he added: “We realized that his comments could be taken both ways—he said the decision to pull back depends on incoming economic indicators, and that led to some buying back.”
Bernanke gave no hint as to when the Fed would start reining in its $85 billion a month bond-buying scheme but said it was “committed to maintaining highly accommodative policies for as long as they are needed.”
While the economy had made “significant progress” since the financial crisis, he said that “we are still far from where we would like to be, and, consequently, it may be some time before monetary policy returns to more normal settings.”
The remarks were welcomed by traders because “quantitative easing” (QE) has been credited with supporting global stock markets.
However, the OECD warned that uncertainty about the future of the scheme had caused global risk.
In cutting its outlook for global growth in 2013 and 2014, the Paris-based organisation said old worries “have been augmented by new concerns, most notably the possibility of significant financial instability in advanced and, especially, (emerging economies) during the exit from unconventional monetary policies in the United States.”
Eyes are now on the release later in the day of minutes from the Fed’s most recent policy board meeting, with analysts looking for clues about the outlook for QE.
In oil trade New York’s main contract, West Texas Intermediate for December delivery, was up 76 cents at $94.10 in Asian trading. Brent North Sea crude for January was up five cents at $106.97.
Gold fetched $1,271.42 per ounce at 1033 GMT compared with $1,272.46 on Tuesday.
In other markets:
— Manila lost 1.80 percent, or 112.51 points, to end at 6,155.34.
— Taipei slipped 0.67 percent, or 55.75 points, to 8,204.46.
Taiwan Semiconductor Manufacturing Co. fell 1.9 percent to Tw$103.0 while smartphone maker HTC rose 1.62 percent to Tw$157.0.
— Wellington fell 0.46 percent, or 22.14 points, to 4,840.36.
— Jakarta ended down 1.08 percent, or 47.55 points, at 4,350.79.
Retailer Hero Supermarket fell 3.97 percent to 3,025 rupiah, while Indah Kiat Pulp & Paper gained 3.50 percent to 1,480 rupiah.
— Bangkok lost 0.54 percent or 7.63 points to 1,404.81.
Coal producer Banpu dropped 0.89 percent to 27.75 baht, while oil company PTT fell 0.97 percent to 305 baht.
— Kuala Lumpur fell 0.47 percent or 8.47 points to close at 1,798.69.
Malayan Banking shed 0.9 percent to 9.56 ringgit, while plantation company Sime Darby lost 0.6 percent to 9.69.
— Mumbai fell 1.22 percent, or 255.69 points, to end at 20,635.13 points.
Pharma firm Wyeth rose 20 percent to 776.80 rupees and Wockhardt rose 4.26 percent to 488.05 rupees.
— Singapore fell 0.25 percent, or 7.85 points, to close at 3,184.23.
