BEIJING, China – Asian stocks were muted Tuesday after declines in Wall Street and Europe as investors looked ahead to this week’s meeting of the U.S. Federal Reserve.
KEEPING SCORE: Tokyo’s Nikkei 225 lost 0.6 per cent to 15,292.64 while China’s Shanghai Composite Index gained 0.8 per cent to 2,308.64. Hong Kong’s Hang Seng rose 0.4 per cent to 23,239.83. Taiwan’s benchmark gained while Seoul, Singapore and Sydney declined.
FED WATCH: Investors were looking ahead to Wednesday’s meeting of the Fed’s policymaking body, the Federal Open Market Committee, for signs about a possible timeline for interest rate hikes. The Fed is winding down its $4 trillion bond-buying program, known as quantitative easing. That is heightening concern about whether the U.S. economy is strong enough to sustain growth without that support.
ANALYST’S TAKE: “The main block of US earnings season is now in its final week and Wednesday night’s FOMC meeting looms large in the market’s psyche,” said strategist Evan Lucas of IG Markets. “With the end of the asset purchase program a foregone conclusion, speculation is once again mounting about the movement of interest rates.”
EUROPEAN STRESS: The European Central Bank released results of stress tests of Europe’s 130 biggest banks and said 13 need to raise more capital to survive a severe downturn. Business confidence in Germany declined for a sixth month. Germany’s DAX lost 0.9 per cent, France’s CAC 40 dropped 0.8 per cent and Britain’s FTSE 100 shed 0.4 per cent.
JAPANESE CONSUMERS: Retail sales rose by a robust 2.7 per cent in September after a 1.9 gain in August. That suggested spending was recovering from a slump that followed this year’s imposition of a sales tax. Marcel Thieliant of Capital Economics warned that wages would have to grow faster to support a further rise in spending but said that was unlikely to happen.
WALL STREET: Shares of companies that follow global economic growth such as oil and materials producers fell Monday on weakness in oil prices and a gloomier global outlook. The Standard & Poor’s 500 closed with a loss of 2.95 points, or 0.2 per cent, at 1,961.63. The Nasdaq composite rose 2.22 points, a fraction of a per cent, to 4,485.93, while the Dow Jones industrial average picked up 12.53 points, or 0.1 per cent, to 16,817.94.
ENERGY: Benchmark U.S. crude was down 45 cents to $80.55 in electronic trading on the New York Mercantile Exchange. The contract shed 1 cent on Monday to close at $81. Brent crude, used to price international oils, lost 60 cents to $85.23.
CURRENCIES: The dollar declined to 107.85 yen from Monday’s 107.88 yen. The euro gained to $1.2712 from Monday’s $1.2698.