Asian stocks end mixed on US rate talk, China fears


Asian mar­kets were mixed Wed­nes­day as traders as­sessed the prospects of an early US in­ter­est rate rise and China s moves to stem a re­cent mar­ket rout. Tokyo put on 0.46 per­cent, or 93.70 points, to close at 20,614.06, while Seoul ended flat, gain­ing 1.77 points to 2,029.76. Syd­ney lost 0.42 per­cent, or 23.9 points, to close at 5,674.0, de­spite big gains by min­ers on the back of an iron ore price rise.

Hong Kong was up 0.44 per­cent or 108.04 points to 24,514.16 by close of trad­ing, while Shang­hai closed down 1.65 per­cent, or 61.97 points, at 3,694.57.

China s bench­mark in­dex saw in­vestors take prof­its af­ter strong gains the pre­vi­ous day sparked by new re­stric­tions on short-selling.

The Shang­hai and Shen­zhen ex­changes said Mon­day in­vestors who bor­row shares must wait un­til the next day to re­pay the loans, in­stead of set­tling the same day as pre­vi­ously. That mea­sure fol­lowed ear­lier in­ter­ven­tions, in­clud­ing ban­ning ma­jor share­hold­ers from selling and fund­ing a state-backed firm to buy stocks.

"The gov­ern­ment s un­prece­dented, rushed mar­ket in­ter­ven­tion may have sup­ported prices ini­tially but at the ex­pense of its long-term cred­i­bil­ity," Alex Wolf, an economist for emerg­ing mar­kets at Stan­dard Life In­vest­ments, told Bloomberg News. Traders were also tak­ing note of a In­ter­na­tional Mon­e­tary Fund dec­la­ra­tion Tues­day that "sig­nif­i­cant work" needs to be done in re­view­ing the in­clu­sion of China s cur­rency in its bas­ket of "spe­cial draw­ing rights" re­serve cur­rency.

The Chi­nese gov­ern­ment is seek­ing to ex­pand use of the yuan by hav­ing it in­cluded in the SDR, an in­ter­na­tional re­serve as­set that cur­rently is com­prised by four cur­ren­cies: the dol­lar, euro, pound and yen.

Tokyo ticked up af­ter a brief slide in open­ing trade, ris­ing on pos­i­tive earn­ings re­ports and a weaker yen, but an­a­lysts ad­vised cau­tion.

Among Ja­panese firms that have al­ready re­ported in the latest earn­ings sea­son, 61 per­cent ex­ceeded profit ex­pec­ta­tions, an im­prove­ment from the 48 per­cent that beat fore­casts in the pre­vi­ous quar­ter, ac­cord­ing to data com­piled by Bloomberg. "The over­seas en­vi­ron­ment will con­tinue to be a drag on the mar­ket," Hiroichi Nishi, a man­ager at SMBC Nikko Se­cu­ri­ties Inc. in Tokyo, told Bloomberg News.

"Lock­hart s com­ments made the mar­ket wary of rate hikes once again. Cau­tion to­ward the Chi­nese econ­omy con­tin­ues to weigh on the mar­ket as well."

Dennis Lock­hart, pres­i­dent of the Fed­eral Re­serve Bank of At­lanta, said Tues­day he sup­ports rais­ing rates in Septem­ber bar­ring an un­ex­pected stum­ble in the US econ­omy.

Cur­rency traders are keep­ing a close eye on US eco­nomic data as they try to gauge the timeline for a rate in­crease -- a plus for the dol­lar -- which is widely ex­pected in Septem­ber or De­cem­ber.

In Tokyo forex trade the dol­lar was at 124.40 yen at the close, up from 123.93 yen early Tues­day.

US stocks ended lower Tues­day fol­low­ing a mixed batch of earn­ings re­ports and a fall by Ap­ple of 3.2 per­cent, leav­ing it down more than 12 per­cent since its July 21 earn­ings re­lease.

The Dow Jones In­dus­trial Av­er­age dropped 0.27 per­cent. The broad-based S&P 500 fell 0.22 per­cent, while the techrich Nas­daq Com­pos­ite In­dex slid 0.19 per­cent.

Welling­ton was flat, inch­ing ahead 0.08 per­cent or 4.76 points to 5,938.51. Con­tact Energy was up 0.80 per­cent at NZ$5.06 while Ge­n­e­sis Energy was down 1.14 per­cent at NZ$1.73.

Taipei rose 0.37 per­cent, or 31.41 points, to 8,542.27. Tai­wan Semi­con­duc­tor Man­u­fac­tur­ing Co shed 1.83 per­cent to Tw$134.0, while Fubon Fi­nan­cial Hold­ing closed 1.22 per­cent higher at Tw$58.0.

Manila closed 0.85 per­cent or 64.26 points higher at 7,662.55. Uni­ver­sal Robina closed 2.56 per­cent higher at 200 pe­sos, Pa­cific Online Sys­tems was un­changed at 20.90 pe­sos, while Metrobank was down 0.45 per­cent at 88.10 pe­sos.

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