Asian stocks ended broadly lower on Tuesday as traders digested the latest coronavirus curbs in China and awaited key central bank decisions for clues on whether they could consider tightening monetary policy earlier than thought.
The Fed’s policy announcement is due on Wednesday and it is likely the U.S. central bank will announce tapering of its bond purchases.
Markets will watch closely the Fed’s language on inflation and the timing of the first interest rate hike since December 2018.
Chinese stocks fell sharply on growing concerns about the country’s economic outlook. Worries over spreading financial contagion worsened after Yango Group offered to exchange some U.S. dollar bonds for new notes personally guaranteed by its chairman to avoid defaulting on upcoming debt payments.
Fitch Ratings downgraded the firm’s rating “C” from “B”, saying that it considered the offer a distressed debt exchange. Moody’s Investors Service earlier cut Yango’s corporate family rating to Caa2 from B2, citing liquidity risk.
The benchmark Shanghai Composite index fell 38.85 points, or 1.10 percent, to 3,505.63 while Hong Kong’s Hang Seng index ended down 54.65 points, or 0.22 percent, at 25,099.67.
Japanese shares closed lower on profit taking after a strong rally in the previous session following Prime Minister Fumio Kishida’s stronger-than-expected election victory.
The Nikkei average dropped 126.18 points, or 0.43 percent, to 29,520.90, while the broader Topix index ended 0.64 percent lower at 2,031.67.
Panasonic lost 1 percent and Olympus gave up 2.4 percent while ANA Holdings and Japan Airlines climbed 1-2 percent on a Nikkei report that entry restrictions would be lifted for foreign students and short-term business travelers.
Australian markets fell after the Reserve Bank left its key rate unchanged at a record low but discontinued its government bond yield target, opening the door for an earlier interest rate hike amid improving economic recovery and rising inflation.
The benchmark S&P/ASX 200 index dropped 46.50 points, or 0.63 percent, to 7,324.30 while the broader All Ordinaries index ended down 45.60 points, or 0.59 percent, at 7,646.60.
Miners BHP, Rio Tinto and Fortescue Metals Group tumbled 2-3 percent as benchmark iron ore futures in China hit their lowest levels in nearly a year on poor demand outlook.
Financials ended broadly lower, with Insurance Australia Group plunging as much as 7 percent after warning of higher costs. Industrial property company Goodman Group jumped 5.6 percent after lifting its full-year earnings growth forecast.
Seoul stocks rose for a second straight session as bullish exports data released on Monday helped ease investor concerns over the global supply chain and its impact on the domestic economy down the road.
The benchmark Kospi climbed 34.55 points, or 1.16 percent, to close at 3,013.49. Market bellwether Samsung Electronics gained 2.3 percent while No. 2 chipmaker SK Hynix and top automaker Hyundai Motor both rose about 1 percent.
New Zealand shares ended a tad lower, with the benchmark NZX 50 index closing down 37.81 points, or 0.29 percent, at 12,992.50. Shares of Westpac Banking Corp slumped 4.7 percent.
U.S. stocks eked out modest gains overnight to reach new record closing highs as upbeat earnings news outweighed disappointing manufacturing and construction spending data.
The Dow rose 0.3 percent, the tech-heavy Nasdaq Composite climbed 0.6 percent and the S&P 500 added 0.2 percent.
Business News
Asian Shares Decline Ahead Of Fed Meeting
2021-11-02 08:44:05
