HONG KONG, (MILLAT+APP/AFP): Asian markets mostly fell Tuesday as
attention turns to this week’s much-anticipated Federal Reserve meeting, while analysts said the recent Trump-fuelled rally may have been overblown.
Global stocks have surged since Donald Trump was elected US president
as investors bet his plans for huge infrastructure spending and tax cuts will kickstart the world’s top economy.
However, with the Fed meeting looming trading floors have quietened,
waiting to see if the central bank provides any forward guidance on its plans for 2017 after an expected interest rate hike.
“With a rate hike at this week’s (meeting) fully priced and given the
strong rally in the dollar, we are likely seeing some paring of positions
heading into the rate decision,” Khoon Goh, head of regional research at
Australia & New Zealand Banking Group in Singapore, told Bloomberg News.
“Market participants are also reassessing whether the Trump rally has
gotten a bit ahead of itself.”
Hong Kong slipped 0.2 percent in the afternoon while Shanghai ended
0.1 percent up, though gains were limited despite a better-than-expected read on Chinese factory output and retail sales.
“The figures are good but the market sentiment remains cautious after
a big drop yesterday,” Linus Yip, a Hong Kong-based strategist at First Shanghai Securities, said. Shanghai sank 2.5 percent on Monday.
Seoul put on 0.4 percent but Sydney lost 0.3 percent while Singapore,
Wellington and Manila were also all down.
– Oil struggles –
=================
The anaemic performance came despite a record close for the Dow on
Wall Street.
However, Tokyo chalked up another gain, adding 0.5 percent to close
at its highest level since mid-December 2015.
On foreign exchanges the dollar edged back against most high-yielding
currencies having tapped multi-month highs against most over the past few weeks.
The Australian dollar, South Korea’s won and Indonesia’s rupiah were
up around 0.2 percent.
The oil-dependent Malaysian ringgit was flat after surging more than
two percent in early trade following Monday’s jump in crude prices after the
weekend agreement by non-OPEC members to slash output.
Crude prices edged down in Asian trade Tuesday and Jeffrey Halley,
senior market analyst at OANDA, said it would likely struggle to break further up after Monday’s more than two percent gains.
“Oil speculators will need a continual stream of good news to
maintain oil’s rally at these levels, as they run into a solid wall of producer hedging (selling) in the futures market,” he said.
“With US shale dusting off more rigs by the day, at these levels,
expect this producer hedging to increase as oil grinds higher.”
– Key figures around 0700 GMT –
===============================
Tokyo – Nikkei 225: UP 0.5 percent at 19,250.52 (close)
Hong Kong – Hang Seng: DOWN 0.2 percent at 22,388.78
Shanghai – Composite: UP 0.1 percent at 3,155.04 (close)
Euro/dollar: DOWN at $1.0634 from $1.0636 Monday
Dollar/yen: UP at 115.30 yen from 115.04 yen
Pound/dollar: DOWN at $1.2675 from $1.2678
Oil – West Texas Intermediate: DOWN 22 cents at $52.61 per barrel
Oil – Brent North Sea: DOWN 16 cents at $55.53
New York – Dow: UP 0.2 percent at 19,796.43 (close)
London – FTSE 100: DOWN 0.9 percent at 6,890.42 (close)