Most Asian Shares Lower on Fed Jitters, Energy Sector--4th Update
28 October 2015 - 7:51PM
Dow Jones News
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.
The Shanghai Composite fell 1.7% and Hong Kong's Hang Seng Index
lost 0.8%. Chinese energy shares listed in Hong Kong fell, with
China Shenhua Energy Co. and China Petroleum & Chemical Corp.
down 2.8% and 1.6%, respectively.
South Korea's Kospi lost 0.1% and Australia's S&P ASX 200
fell 0.2%, with energy shares on the benchmark 1.3% lower.
Santos Ltd. fell 4.8% and Woodside Petroleum Ltd. was 2.6%
lower.
Meanwhile, Japan's Nikkei Stock Average was up 0.7%, 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 $0.7122.
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 now 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.
In China, the defense sector fell 5% as investors cashed in on a
jump of more than 7% the previous session. The sector rallied
Tuesday after a U.S. Navy ship sailed close to artificial islands
in the South China Sea claimed by China, escalating territorial
tensions.
Near-term performance also will depend on whether leaders reveal
new plans to boost the sector at their economic meeting in Beijing
this week, according to analysts.
The Japanese yen was last at Yen120.41, 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 the South China
Sea news sent investors toward haven assets.
In Australia, shares of National Bank of Australia Ltd. were
down 2.2%, 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).
In South Korea, battery maker LG Chem Ltd. rallied 5% after the
local Nihon Keizai Shimbun reported that the firm is in the final
stage of becoming a lithium-ion batteries supplier to Tesla Motors
. The stock rose as much as 7.3% during the trading day.
An LG spokesman declined to confirm the report, but Tesla told
The Wall Street Journal Wednesday it had a contract earlier this
year with LG for upgrades to the U.S. electric vehicle maker's
first car, the Roadster, which has since been discontinued.
After the market close in Japan, Nintendo Co. reported an
operating profit of Yen8.98 billion ($74.6 million) in the
April-to-September period, buoyed by its core game business and
game-interactive figurines and cards. The gains were a turnaround
from a loss of Yen215 million a year ago, but lower than analysts'
expectations of a Yen14.4 billion profit.
Nintendo shares have surged 83% year to date, beating the
broader market's 8% gain.
Brent crude oil was down 0.1% at $46.75. U.S. oil prices fell
2.3% overnight, on expectations that U.S. crude stockpiles grew for
the fifth straight week last week.
Overnight, U.S. stocks mostly fell as oil prices slumped and
investors await the outcome of the Fed's meeting.
Gold was up 0.5% at $1,171 a troy ounce.
Takashi Mochizuki, In-Soo Nam and Robb M. Stewart contributed to
this article.
Write to Chao Deng at Chao.Deng@wsj.com
(END) Dow Jones Newswires
October 28, 2015 04:36 ET (08:36 GMT)
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