Tokyo, Mar 17:Asian shares were mixed Wednesday as world markets cautiously awaited the US central bank’s latest comments on the economic outlook.
Japan’s benchmark Nikkei 225 inched up nearly 0.1 per cent to 29,948.69. South Korea’s Kospi slipped 0.8 per cent to 3,041.72. Australia’s S&P/ASX 200 dipped 0.8 per cent to 6,772.60. Hong Kong’s Hang Seng edged up 0.1 per cent to 29,057.59, while the Shanghai Composite was little changed, recouping early losses, gaining less than 0.1 per cent to 3,448.53.
Investors are awaiting the Federal Reserve’s latest economic and interest rate projections, expected later in the day. Economists expect Fed Chair Jerome Powell will try to convince jittery financial markets that the central bank can continue providing support without igniting higher inflation.
Those worries have recently pushed bond yields higher, sapping buying demand for shares.
The Fed meeting “carries the potential to either allay or heighten some of the market’s recent concern with regard to the soaring bond yields,” said Jingyi Pan, senior market strategist at IG in Singapore.
Wall Street capped a choppy day of trading with indexes closing mostly lower. Losses by banks, industrial stocks and companies that rely on consumer spending, including cruise line operators, outweighed gains by Big Tech and communication services stocks.
The S&P 500 dropped 0.2 per cent to 3,962.71. The Dow Jones Industrial Average lost 0.4 per cent to 32,825.95. The Nasdaq bucked the trend, benefiting from the rally in technology stocks and rising 0.1 per cent, to 13,471.57.
The big technology names that soared in 2020 were among the gainers. Apple rose 1.6 per cent; Google’s parent company Alphabet added 1.4 per cent and Facebook rose 2 per cent.
Small company stocks lagged the broader market. The Russell 2000 index shed 1.7 per cent, to 2,319.52.
Investors weighed new economic data Tuesday that showed Americans cut back on spending last month, partly due to bad weather in wide parts of the country that kept shoppers away from stores, and partly due to December and January stimulus payments running out.
Retail sales fell a seasonally adjusted 3 per cent in February from the month before, the US Commerce Department said Tuesday. February’s drop followed soaring sales in January as people spent USD 600 stimulus checks sent at the end of last year. In fact, the Commerce Department revised the rise in January upwards to 7.6 per cent from the previously reported 5.3 per cent.
Meanwhile severe winter weather pushed industrial production down a sharp 2.2 per cent in February, reflecting a big decline in factory output.
“We’re still in the midst of getting back to a more normal environment,” said Jason Pride, chief investment officer of private wealth at Glenmede.
“Given the lumpiness of government stimulus payments, we’re going to see numbers jumping around.”
Investors are betting big that this economic malaise will dissipate as spring arrives for most of the country and more Americans get vaccinated. Further, President Joe Biden’s administration started sending out USD 1,400 stimulus checks to individuals last weekend.
In energy trading, US benchmark crude fell 9 cents to USD 64.71 a barrel in electronic trading on the New York Mercantile Exchange. It lost 59 cents to USD 64.80 on Tuesday. Brent crude, the international standard, lost 15 cents to USD 68.24 a barrel.
In currency trading, the US dollar rose to 109.12 Japanese yen from 108.99 yen. The euro cost USD 1.1906, up from USD 1.1903. (AGENCIES)
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