Asian stocks mixed after Wall Street rebound

23-Aug-2019 Intellasia | AP | 6:02 AM Print This Post

Asian stock markets are mixed Thursday following Wall Street’s rebound as investors looked ahead to a speech by the US Federal Reserve chair for clues about possible interest rate cuts.

Investor reaction was muted following Wednesday’s release of notes from the latest Fed meeting showing conflicting opinions about rates.

Benchmarks in Shanghai and Hong Kong fell, while Tokyo and Sydney climbed.

Investors are looking to Chair Jerome Powell’s speech Friday for guidance about whether the Fed might cut rates at its next meeting in September. The Fed cut its key policy rate on July 31 for the first time in more than a decade, citing President Donald Trump’s tariff battle with Beijing and other possible threats to economic growth.

Markets have a “high degree of policy uncertainty” ahead of Powell’s speech and US-China trade talks in September, said Stephen Innes of Oanda in a report.

Mixed views rates among Fed leaders are “well documented,” but the notes are a “reminder of how challenging it could be for Chair Powell to meet the market’s exceedingly dovish expectations,” said Innes.

The Shanghai Composite Index dropped 0.2 percent to 2,876.08 and Hong Kong’s Hang Seng fell 0.7 percent to 26,095.95.

Tokyo’s Nikkei 225 edged up 0.1 percent to 20,647.87 and Sydney’s S&P-ASX 200 rose 0.3 percent to 6,505.90.

Seoul’s Kospi was 0.6 percent lower at 1,953.39. New Zealand was up while Taiwan and Southeast Asian markets declined.

On Wall Street, the Standard & Poor’s 500 index rose 0.8 percent to 2,924.43. The Dow Jones Industrial Average gained 0.9 percent to 26,202.73. The Nasdaq added 0.9 percent to 8,020.21.

Traders say strong quarterly results from retailers as a sign of health among consumers who account for 70 percent of US economic growth.

Target notched its biggest-ever gain, while Lowe’s had its best day in more than a year, leading a broad rally in companies that rely on consumer spending. Nordstrom, Kohl’s, Gap and other retailers closed higher.

Technology companies accounted for a big share of the gains. Financial stocks rose as bond prices fell, pushing yields higher. Real estate and materials stocks lagged the rest of the market.

The Trump administration has imposed a 25 percent tariff on $250 billion in Chinese imports. A pending 10 percent tariff on another $300 billion in goods would hit everything from toys to clothing and shoes that China ships to the United States. But 60 percent of the new tariffs wouldn’t go into effect until mid-December, and others were taken off the table altogether.

ENERGY: Benchmark US crude gained 2 cents to $55.70 per barrel in electronic trading on the New York Mercantile Exchange. The contract lost 45 cents on Wednesday to close at $55.68. Brent crude, used to price international oils, declined 4 cents to $60.26 in London. It gained 27 cents the previous session to $60.30.

CURRENCY: The dollar dropped to 106.40 yen from Wednesday’s 106.62 yen. The euro rose to $1.1089 from $1.1086.


Category: FinanceAsia

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