By Daniel Inman
Southeast Asian markets notched up healthy returns for a week
that was dominated by developments suggesting that U.S. monetary
policy could remain easier than previously expected.
On Monday, stocks moved higher on news that Lawrence Summers had
withdrawn from the race to become the next chairman of the Federal
Reserve -- a candidate expected to roll back the central bank's
stimulus soon after taking the post.
Then on Thursday, markets received another boost from the Fed's
surprise decision to keep its monetary policy steady, going against
widespread expectations for the bank to start reducing its
bond-buying program.
The end result was substantial gains for Southeast Asian markets
that had been beaten down over the summer. The fear of a removal of
U.S. stimulus efforts, which had supported these small markets in
recent years, prompted investors to pull their money out of
countries like Indonesia and the Philippines.
The gains this week helped the recovery of these markets:
Indonesia's JSX is 6.4% higher since last Friday and Thailand's SET
jumped 6.3% over the same period.
On Friday, Asian stocks took a pause after their strong gains in
the previous session: Australia's S&P/ASX 200 fell 0.4%,
Indonesia's JSX fell 0.3% and the Philippines PSE Composite dropped
0.2%.
"Today looks like being one of those Fridays where markets take
stock after a big news week," said Ric Spooner, chief market
analyst at CMC Markets. "We may see some profit-taking by short
term sellers disappointed that yesterday's strong upward momentum
was not followed through," Spooner added.
Japan's Nikkei was flat as the U.S. dollar weakened slightly in
Asia after it strengthened against the yen (USDJPY) on Thursday.
The greenback was at Yen99.30 early Friday, after a 1.6% gain in
the previous session.
In Tokyo, real estate firm Mitsubishi Estate Co. (MITEF) rose
1.2% after the average land price in greater Tokyo, Osaka and
Nagoya rose 0.1% on year as of July 1, the first on-year rise in
five years.
Also in Tokyo, retailer Aeon Co. (AONNF) dropped 0.9% after a
Nikkei report said that the company's consolidated operating profit
for the six months ending Aug. 31 will likely fall short of market
consensus.
Much of North Asia was closed for public holidays on Friday,
with Mainland China, Hong Kong and South Korea all closed for a
public holiday. Markets in Shanghai and Seoul were closed on
Thursday as well, which means that they have not yet had a chance
to react to the Fed's latest policy decision.
When these markets come online on Monday, there will also be an
installment on the Chinese economy in the form of preliminary
manufacturing data for September -- a number that has impacted
markets in recent months.
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