ASIA MARKETS: Asian Markets Mixed Ahead Of Fed Rate Decision
December 18 2018 - 11:19PM
Dow Jones News
By Marketwatch and Associated Press
Weak trade data send Nikkei down; SoftBank spinoff sinks after
giant IPO
Asian stock markets were mixed Wednesday, as traders mulled over
the Federal Reserve's interest rate decision and
weaker-than-expected Japanese trade data.
Japan's Nikkei 225 index fell 0.4% after data showed export
growth stalled last month. Shares of SoftBank Corp., the mobile
unit of tech giant SoftBank Group (9984.TO) , fell around 10%
following its massive initial public offering, which sought to
raise about $18 billion. Tech companies Advantest (6857.TO) and
Fujitsu (6702.TO) rose more than 2%, while energy and utiity stocks
fell. Oil company Inpex (1605.TO) dropped 6% while Tokyo Gas
(9531.TO) fell 5%.
Read:Shares of SoftBank mobile unit slide after massive $18
billion IPO
(http://www.marketwatch.com/story/shares-of-softbank-mobile-unit-slide-after-massive-18-billion-ipo-2018-12-18)
On Wednesday, Japan reported that its trade balance in November
was a deficit of 737.3 billion yen, from 450.1 billion yen in the
previous month. This is its fourth deficit in last five months. The
country's exports broadly slowed, partly due to weakening demand
from China. Japanese exports rose 0.1% from a year earlier, as
compared to October's 8.2% gain. This fueled concerns about the
impact of the US-China trade dispute on the world's third-largest
economy.
Hong Kong's Hang Seng was 0.1% higher. Casino operators Sands
China (1928.HK) and Galaxy Entertainment (0027.HK) gained more than
1% each, while energy names dropped amid the recent plunge in oil
prices. China Petroleum (600028.SH) and CNOOC (0883.HK) were each
down more than 3%.
Stocks fell in mainland China, with the Shanghai Composite index
down 0.2% and the smaller-cap Shenzhen Composite off 0.4%. South
Korea's Kospi rose 0.6% as Samsung (005930.SE) rose modestly.
Australia's S&P ASX 200 gave up 0.5%. Shares were higher in
Taiwan and Southeast Asia.
On Tuesday, most U.S. indexes broke a two-day losing streak as
technology and consumer-focused companies climbed. Energy stocks
plummeted along with crude oil, which reached its lowest price
since August 2017. The broad S&P 500 index added 0.22 points to
2,546.16. The Dow Jones Industrial Average gained 0.4 percent to
23,675.64 and the Nasdaq composite was up 0.4 percent at
6,783.91.
The Fed is widely expected to raise its short-term interest rate
after a meeting ends Wednesday. It is expected to raise the rate --
used as a benchmark for many consumer and business loans -- by a
modest quarter point to a range of 2.25% to 2.5%. The central bank
has forecast three more hikes in 2019, but investors doubt it would
go as planned. Higher rates can slow economic growth and the U.S.
economy is expected to cool off in 2019. China and Europe have also
suggested that growth is slowing.
"Positive signals on the trade war front are stabilizing risk in
Asia," Stephen Innes of OANDA said in a note. "Indeed, this is
market in need of some good news and while trade remains a work in
progress investors are at least taking some comfort that a
resolution roadmap could be in place as soon as March 2019."
Oil prices bounced back slightly after plunging on worries about
rising supplies and weakening global growth, which could weigh on
demand. Benchmark U.S. crude gained 12 cents to $46.72 a barrel in
electronic trading on the New York Mercantile Exchange. The
contract, which has fallen almost 40 percent since October, gave up
$3.60 to $46.60 on Tuesday. Brent crude , used to price
international oils, added 34 cents to $56.60 a barrel. It lost
$3.35 to $56.26 a barrel in London.
The dollar weakened to 112.39 yen from 112.52 yen in late trading Tuesday.
"The dollar has been on offer throughout the Asia session as
traders start aggressively pricing what is expected to be a dovish
Fed hike," Innes said. "Indeed it's becoming a very solid
risk-reward to be short dollars heading into this Fed hike."
(END) Dow Jones Newswires
December 18, 2018 23:04 ET (04:04 GMT)
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