Asian shares mixed, eyes on Fed meeting

A currency trader walks in front of a screen showing the Korea Composite Stock Price Index (KOSPI) at the foreign exchange dealing room of the Korea Exchange Bank headquarters in Seoul, Monday, Jan. 27, 2014. Asian stock markets were mixed Tuesday after suffering a heavy sell-off in the previous session, with traders still nervous over emerging economies as they await the Federal Reserve’s next move on its stimulus program. AP PHOTO/LEE JIN-MAN

HONG KONG –Asian markets were mixed Tuesday after suffering a heavy sell-off in the previous session, with traders still nervous over emerging economies as they await the Federal Reserve’s next move on its stimulus program.

The dollar edged higher against the yen after sinking to near two-month lows on Monday but that was unable to stop Japan’s Nikkei from sliding to a two-and-a-half-month low.

Tokyo closed down 0.17 percent, or 25.57 points, to 14,980.16, ending below 15,000 for the first time since mid-November, while Seoul rose 0.34 percent, or 6.59 points, to 1,916.93.

Sydney, which was catching up with Monday’s losses as it was closed for a holiday, fell 1.26 percent, or 65.8 points, to 5,175.1.

Hong Kong ended flat, dipping 15.46 points to 21,960.64 and Shanghai closed 0.26 percent, or 5.21 points, higher at 2,038.51.

Regional markets slumped on Monday, taking a lead from Wall Street and Europe on Friday, as a plunge in the Argentine peso last week sparked fresh worries about developing nations’ economies.

Wall Street extended its losses on Monday, with the Dow falling 0.26 percent, the S&P 500 down 0.49 percent and the Nasdaq 1.08 percent lower. In Europe the main markets in London, Paris and Frankfurt also saw big losses.

There is growing concern that with the Fed on a course of winding down its stimulus program, the cash that has provided strong investment support for emerging economies—from Argentina and South Africa to Indonesia and India—could dry up, leading to a flight of capital.

Adding to that is a string of weak Chinese data, including last week’s dire manufacturing figures, which have raised questions about the world’s No. 2 economy, which is a key driver of growth.

Eyes are now on the Fed’s latest two-day meeting, which kicks off Tuesday. Despite the latest turmoil, there is speculation it will cut a further $10 billion from its monthly asset purchases, to $65 billion, following a similar announcement last month.

Kenichi Hirano, market analyst at Tachibana Securities, told Dow Jones Newswires: “There is a lot of confusion over what the Fed may say and, more importantly, how markets will react.

“The Fed needs to be very careful to stick to tapering while not upsetting markets that have gotten so used to cheap, easy money that they don’t immediately know what to do without it.”

On currency markets, the dollar edged up to 102.75 yen in afternoon Asian trade from 102.56 yen in New York as investors moved back into the unit after it sank to as low as 101.77 yen in Tokyo at one point Monday.

The euro was also up at 140.45 yen from 140.21 yen and was at $1.3667 against $1.3670.

The single currency was supported by an upbeat report from Germany. The Ifo economic institute said its closely watched German business climate index climbed to 110.6 points in January, up from 109.5 points in December, and that the outlook was the most optimistic in almost three years.

In Japanese trade, electronics giant Sony ended 2.86 percent lower after Moody’s cut its debt rating to junk status, saying it had more work to do in repairing its battered balance sheet.

The move comes less than three months after Sony slashed its full-year profit outlook by 40 percent, citing weak demand for its digital cameras, personal computers and televisions.

Oil prices rose. New York’s main contract, West Texas Intermediate for March delivery, was up 23 cents at $95.95 in afternoon Asian trading while Brent North Sea crude for March gained 32 cents to $107.01.

Gold fetched $1,254.37 at 1057 GMT, compared with $1,270.56 late Monday.

In other markets:

— Wellington eased 0.11 percent, or 5.36 points, to 4,848.44.

Air New Zealand fell 1.15 percent to NZ$1.72 and Sky Television slipped 1.19 percent to NZ$5.82 but Telecom rose 1.27 percent to NZ$2.395.

— Manila closed 0.97 percent lower, giving up 58.80 points to 6,022.81.

Philippine Long Distance Telephone Co. dropped 0.22 percent to 2,704 pesos but SM Prime Holdings rose 1.36 percent to 14.86 pesos.

— Jakarta ended up 0.44 percent, or 18.87 points, at 4,341.65.

Cement maker Indocement Tunggal Prakarsa gained 5.07 percent to 21,250 rupiah, while palm oil firm Wilmar Cahaya Indonesia fell 9.77 percent to 1,200 rupiah.

— Kuala Lumpur gained 0.13 percent, or 2.37 points, to 1,781.25.

Public Bank added 0.09 percent to 18.98 ringgit, Tenaga Nasional rose 1.45 percent to 11.16 while Sime Darby lost 0.22 percent to 8.95.

— Singapore rose 0.66 percent, or 19.98 points, at 3,062.41.

Oversea-Chinese Banking Corporation was up 0.32 percent at Sg$9.47 while vehicle distributor Jardine Cycle and Carriage eased 0.22 percent at Sg$35.84.

— Bangkok fell 1.30 percent, or 16.80 points, to 1,271.79.

Airports of Thailand dropped 3.43 percent to 169 baht, while telecoms company True Corporation slipped 2.70 percent to 7.20 baht.

— Mumbai lost 0.12 percent, or 23.94 points, to 20,683.51.

Top carmaker Maruti Suzuki fell 8.12 percent to 138.15 rupees while IRB Infrastructure Developers shed 5.19 percent to 70.30 rupees.

— Taipei was closed for a public holiday.—Danny McCord