Asian shares saw an undramatic day on Wednesday with investors cautiously waiting on the key Federal Reserve meeting later today.
Traders are on tenterhooks with any rate hike decision by the US central bank, which is facing runaway prices, set to impact Asia’s central banks and economic policy across the region.
The Federal Reserve is expected to announce a 0.75 percentage point interest rate hike to fight inflation, with markets pricing about a 10% risk of a larger increase.
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Japan’s Nikkei reversed course to end higher, helped by gains in heavyweight chip-related stocks. The Nikkei inched up 0.22% to 27,715.75 and the broader Topix inched 0.13% higher to 1,945.75.
The benchmark index opened with small declines after Wall Street ended sharply lower on Tuesday as a profit warning by Walmart dragged down retail shares and exceptionally weak consumer confidence data also fuelled fears about spending.
Chip-related heavyweights Tokyo Electron and Advantest boosted the Nikkei, jumping 3.1% and 2.28%.
Mainland China and Hong Kong stocks ended lower, though, with investors worried about future monetary tightening.
Chinese investors continued to be worried about the property sector, after Country Garden Holdings said it planned to raise HK$2.8 billion from a share sale, raising proceeds for refinancing offshore debt, general working capital and future development purposes.
The real estate index fell 0.44%, while mainland developers listed in Hong Kong plunged 6.2%.
China, Hong Kong Shares Suffer
The Shanghai Composite index ended down 0.05% at 3,275.76 points, while the blue-chip CSI300 index fell 0.5% to 4,225.04 points.
The financial sub-index dropped 0.55%, the consumer staples sector lost 1.3%, and the healthcare sub-index dropped 1.6%.
The smaller Shenzhen index inched up 0.33%, the start-up board ChiNext Composite index climbed 0.03%, and Shanghai’s tech-focused STAR50 index gained 1.02%.
In Hong Kong, the benchmark Hang Seng Index fell 1.13% to 20,670.04, while Chinese H-shares listed in Hong Kong dropped 1.3% to 7,091.47.
Elsewhere across the region, most stock markets reversed losses recorded in early trades. Stocks in Taipei and Kuala Lumpur were up and shares in Bangkok rose nearly 1% to hit their highest since July 8.
Indian stocks were up too with Mumbai’s signature Nifty 50 index gaining 0.76%, or 125.15 points, at 16,609.00.
Russian Energy Crunch Threat
Globally, better-than-expected earnings from a raft of US and European companies helped steady global stock markets, cutting through gloom caused by rising interest rates and the threat of an energy crunch due to Russian gas supply cuts.
Ten-year US Treasury bond yields – the reference rate for global cost of capital – held near three-month lows touched on Tuesday, while several bond market recession gauges continued to flash warnings that growth in the world’s largest economy is slowing, if not going into reverse.
Futures for the US S&P 500 and Nasdaq and rose 1% to 1.5%, while a pan-European equity index was up 0.4%.
Wall Street sentiment was lifted by 4%-5% gains on shares in Microsoft and Google parent Alphabet, which forecast strong revenue growth and posted solid search engine ad sales respectively.
Supply shortfalls and possible energy rationing were among issues highlighted by the International Monetary Fund (IMF) on Tuesday, when it cut global growth forecasts.
A complete cut-off of Russian gas to Europe by year-end and a further 30% drop in oil exports may lead to virtually zero European and US growth next year, the IMF warned.
Key figures
Tokyo – Nikkei 225 > UP 0.22% at 27,715.75 (close)
Hong Kong – Hang Seng Index < DOWN 1.13% at 20,670.04 (close)
Shanghai – Composite < DOWN 0.05% at 3,275.76 (close)
New York – Dow < DOWN 0.7% at 31,761.54 (Tuesday close)
- Reuters with additional editing by Sean O’Meara
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