Asian markets mostly down ahead of US Fed meeting
HONG KONG—Asian markets mostly retreated Tuesday following losses on Wall Street as dealers awaited a meeting of the US Federal Reserve policy committee hoping for a fresh round of stimulus measures.
Attention was also on Germany, where a court is due to rule on the constitutional legality of Berlin taking part in a rescue fund set up to support under-pressure countries.
Tokyo fell 0.70 percent, or 61.99 points, to 8,807.38, Sydney closed 0.18 percent, or 8.0 points, lower at 4,325.8 and Seoul lost 0.24 percent, or 4.70 points, to close at 1,920.00.
Shanghai ended down 0.67 percent, or 14.34 points, at 2,120.55 but Hong Kong staged a late rally to close 0.15 percent higher, adding 30.71 points to 19,857.88.
“Recent weak economic data has led some to expect further stimulus, so investors are behaving cautiously until they see more policy signals,” Everbright Securities analyst Zeng Xianzhao told Dow Jones Newswires.
Euphoria has eased after Friday’s announcement from the European Central Bank that it will buy the sovereign bonds of debt-hit nations.
As global markets anticipated a rapid international rescue for Spain, the eurozone’s fourth-biggest economy, Prime Minister Mariano Rajoy refused to be rushed into a deal that dictates spending cuts or touches old-age pensions.
The Fed’s meeting has now become the main focus with hopes that Fed chief Ben Bernanke will unveil a third round of bond-buying, or quantitative easing, to kickstart the US economy, which has seen a stuttering recovery from the global downturn.
Those expectations were given more impetus Friday following a disappointing set of job figures.
With dealers taking a wait-and-see approach, Wall Street slid on Monday. The Dow finished down 0.39 percent, the S&P 500 dropped 0.61 percent and the Nasdaq shed 1.03 percent.
“Equity markets globally are consolidating after a pretty good run-up since late last week,” John Milroy, investment advisor at Macquarie Private Wealth in Australia, said.
US indexes were also hurt by the Fed’s announcement that consumer credit fell in July after 10 months of gains, raising concerns about confidence while unemployment remains high.
On currency markets the European unit bought 100.10 yen, compared with 99.86 yen late Monday in New York, while it also fetched $1.2795 compared with $1.2758 in US trade.
The dollar was at 78.19 yen, from 78.27 yen.
German judges are due Wednesday to rule on whether the eurozone’s 500-billion-euro ($640-billion) rescue fund, the European Stability Mechanism (ESM) and the EU fiscal pact are compatible with the country’s constitution.
The verdict is the last legal hurdle for the ESM before it can come into effect. While the verdict is expected to be positive, there are fears a decision against it could blow the whole eurozone project apart.
Traders took some comfort from news out of Germany that the court would not delay its decision following a last-minute legal challenge by a leading eurosceptic politician in the wake of the ECB’s bond-buying program.
New York’s main contract, light sweet crude for delivery in October, fell five cents to $96.49 a barrel and Brent North Sea crude for October was seven cents lower at $114.74.
Gold was at $1,730.35 at 1100 GMT compared with $1,732.83 on Monday.
In other markets:
— Taipei edged up 2.39 points, or 0.03 percent, at 7,485.13.
Taiwan Semiconductor Manufacturing Co. rose 1.08 percent at Tw$84.4 while Hon Hai Precision added 1.80 percent at 90.4.
— Manila ended flat, nudging down 4.76 points to 5,186.05.
BDO Unibank eased 0.59 percent to 59.25 pesos and Megaworld fell 1.37 percent to 2.16 pesos.
— Wellington closed up 0.48 percent, or 18.05 points, at 3,744.96.
Fisher & Paykel Appliances was up 7.22 percent at NZ$1.04.
— Singapore closed 0.26 percent, or 7.68 points, higher, at 3,016.40.
Fraser and Neave rose 1.29 percent to Sg$8.66 and Singapore Airlines fell 0.28 percent to Sg$10.52.
— Kuala Lumpur lost 6.80 points, or 0.42 percent, to end at 1,614.24.
Malayan Banking shed 0.22 percent to 9.15 ringgit, while CIMB Group Holdings declined 1.62 percent to 7.28. Felda Global Ventures Holdings gained 1.07 percent to 4.73 ringgit.
— Bangkok fell 0.21 percent, or 2.61 points, to 1,248.32.
Coal producer Banpu fell 2.69 percent to 434 baht, while PTT lost 0.61 percent to 327 baht.
— Jakarta closed 0.13 percent lower, or 5.30 points, at 4,155.36.
Carmaker Astra International fell 2.0 percent to 7,250 rupiah, Bank Mandiri declined 1.9 percent to 7,750 rupiah, while coal company Indika rose 2.0 percent to 1,540 rupiah.
— Mumbai rose 0.49 percent, or 86.17 points, to 17,852.95.
India’s private housing finance firm HDFC increased 2.49 percent to 758.1 rupees. The country’s largest private iron-ore producer Sesa Goa fell 5.81 percent to 159.8 rupees.