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Asian stocks end slightly lower ahead of Fed meeting on rates

Asian stocks end slightly lower ahead of Fed meeting on rates
AFP
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First Published: Tue, Jun 24 2008. 11 49 PM IST

Leading the way: People monitor stock prices at a securities exchange firm in Shanghai, China. (Photograh by Qilai Shen / Bloomberg)
Leading the way: People monitor stock prices at a securities exchange firm in Shanghai, China. (Photograh by Qilai Shen / Bloomberg)
Updated: Tue, Jun 24 2008. 11 49 PM IST
Hong Kong: Asian stocks closed mostly down on Tuesday amid uncertainty ahead of a US interest rate decision later this week and continuing fears over the economic damage from soaring oil prices.
Leading the way: People monitor stock prices at a securities exchange firm in Shanghai, China. (Photograh by Qilai Shen / Bloomberg)
The biggest drop was 1.76% in Taipei, where an analyst said concerns over oil prices were likely to run deeper as, despite Saudi Arabia increasing production, the crisis drags on.
Seoul fell 0.3% as it worried about US economic conditions and oil costs, while Hong Kong dropped 1.14%, Singapore shed 0.57% and Sydney remained level.
Tokyo was little changed as dealers awaited the outcome of the two-day US Federal Reserve meeting starting Tuesday, with most analysts expecting interest rates to be kept at 2%.
Shanghai was one of just three to buck the regional trend, rising 1.54%, a day after shedding 2.54%.
However, its gains came as China’s largest steel maker fell after agreeing to a new iron ore price deal with Rio Tinto. Wellington and Kuala Lumpur were also slightly up.
In Tokyo, the benchmark Nikkei-225 index slipped 7.91 points, or 0.06%, to end at 13,849.56. The broader Topix index of all first-section shares edged up 1.26 points, or 0.09% to 1,349.19.
“It seems like only short-term investors are trading,” Yutaka Miura, senior technical analyst at Shinko Securities, told Dow Jones Newswires.
Market players were looking ahead to the Fed’s two-day meeting, slated to begin Tuesday, at which US interest rates are expected to be left unchanged at 2%, dealers said.
Investors will be focusing on the Fed’s post-meeting statement for any clues on prospects for higher US interest rates that could pressure Wall Street shares.
Steel shares were under pressure after Anglo-Australian mining group Rio Tinto said Monday it had agreed to a near doubling of the price of its iron ore sales to Chinese steel maker Baosteel.
Auto makers fared better, with Honda Motor adding 2.7% to 3,770 yen.
In Shanghai, shares closed 1.54% higher as a rebound by large-cap financial and property developers boosted the market, dealers said.
The benchmark Shanghai Composite Index, which covers A and B shares, closed up 42.60 points at 2,803.02 on turnover of 49.9 billion yuan (Rs31,237 crore).
“But the gains in these companies aren’t sustainable as the rising ore iron price and energy price are adding pressure to inflation,” said Wang Junqing, an analyst at Guosen Securities.
However, Taipei shares closed 1.76% lower, dealers said. The weighted index fell 138.37 points to end at the day’s low of 7,738.12, on a turnover of 92.87 billion Taiwan dollars (Rs13,095 crore).
The bellwether electronics sector, led by flat panel display makers, was down 1.88%. Inflation fears set in to erode earlier gains after the market had managed to rebound, dealers added.
South Korean shares also closed 0.3% lower as investors picked up oversold consumer electronics goods makers and financial stocks, dealers said.
The Kospi closed down 4.75 points at 1,710.84, after falling as low as 1,699.81.
Singapore share prices closed 0.57% lower Tuesday, dealers said. The blue chip Straits Times Index fell 16.99 points to 2,962.16 on a volume of one billion shares.
DBS Vickers said that “in the near term, the market is expected to be volatile with a downside bias as it climbs the wall of concerns over rising inflation and interest rates”.
The Fed is widely expected to leave its base rate unchanged at 2% after its two-day meeting on Wednesday, economists said.
Local bank DBS dropped 18 cents (Rs5.66) to 18.74 Singapore dollars, while CapitaLand slipped six cents to 5.75.
The Kuala Lumpur Composite Index rose 4.87 points to 1,200.28.
The Thai stock market also closed 0.67% lower as investors stayed on the sidelines awaiting the result this week of a no-confidence vote against the government, dealers said.
The Stock Exchange of Thailand (SET) composite index fell 5.15 points to close at 763.75 points, while the blue-chip SET 50 index lost 4.47 points to close at 544.92.
Indonesian shares, meanwhile, closed little changed on Tuesday as investors looked for fresh leads, dealers said.
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First Published: Tue, Jun 24 2008. 11 49 PM IST
More Topics: Asian Stocks | Fed | Shanghai | Tokyo | US |