BackAsian shares drift lower, Fed meeting awaited
The Fed is expected to announce the completion of its quantitative easing programme after a two-day meeting starting later in the session
Premium
Tokyo: Asian shares wobbled in early trade on Tuesday, with investors cautious ahead of the US Federal Reserve’s two-day meeting and as oil prices extended declines.
The Fed is expected to announce the completion of its quantitative easing programme after a two-day meeting starting later in the session and will likely reinforce its stated willingness to wait a long while before hiking interest rates after a volatile month in financial markets. “With the end of the asset purchase programme a foregone conclusion, speculation is once again mounting about the movement of interest rates," said Evan Lucas, market strategist at IG.
Data on Monday showed US services sector activity slowed in October to a six-month low, while manufacturing output in Texas decreased, providing more evidence that the Fed has reason to wait before raising US interest rates.
MSCI’s broadest index of Asia-Pacific shares outside Japan inched down about 0.1% in early trade, after a lacklustre session on Wall Street.
Japan’s Nikkei stock average edged down about 0.2%, despite upbeat economic data released before the market open.
Japanese retail sales in September rose 2.3% from a year earlier, government data showed, suggesting consumer spending is gradually picking up.
The US dollar edged higher after slipping overnight on expectations of more dovish comments from the Fed.
The dollar crawled about 0.1% higher to ¥107.87, but remained below Monday’s nearly three-week high of 108.38.
It was steady on the day against the euro at $1.2701.
The single currency was underpinned by a report released over the weekend that showed that Europe’s bank stress tests beat market expectations, with only one in five of the region’s top lenders failing at the end of last year, and many have since repaired their finances.
But Germany’s closely watched Ifo report of business sentiment on Monday showed the index hit its lowest level in almost two years in October, indicating that Europe’s largest economy faces challenges.
US crude for December was down about 0.4% at $80.65 per barrel after dropping as low as $79.44 on Monday, its lowest level since June 2012, after Goldman Sachs cut its price forecasts. Concerns about weak global demand and booming supply continued to loom over the market. Spot gold was steady at $1,225.34 an ounce. Reuters
Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!
