Australian shares rebounded on Tuesday, boosted by materials and healthcare, after Federal Reserve Board Governor Lael Brainard’s comments on the US economy strengthened the view that the central bank would leave interest rates unchanged next week.
Ms Brainard said she wanted to see a stronger trend in US consumer spending and evidence of rising inflation before the Fed raises rates, reducing prospects of a near-term interest rate hike.
The dollar was nursing losses against its peers after Brainard reiterated her dovish views.
“The rally that we saw in US trading after those (Brainard’s) comments is one of the reasons why we are seeing such a positive performance today across the Asia-Pacific region,” said Michael McCarthy, chief market strategist with CMC Markets.
Taiwan stocks hit their lowest in almost two months on Tuesday in volatile trading, tracking declines in some other regional markets, with a recovery in some heavyweights such as TSMC limiting the falls.
The main Taiex index was down 0.14 per cent at 8934.51 at 0315 GMT. It had dipped to as low as 8,885.55 earlier in the session, an intraday level not seen since July 15.
Taiwan’s market sentiment has been cautious, in part prompted by massive foreign selling. The electronics subindex sank 0.3 per cent, while the financials subindex lost 0.7 per cent.
Taiwan Semiconductor Manufacturing Co (TSMC), the world’s top contract chip maker and the market’s most heavily-weighted share, dipped nearly 1 per cent but recovered later.
The South Korean won and shares rebounded early on Tuesday after US Federal Reserve Governor Lael Brainard’s comments made it more likely that the Fed will stand pat in September.
The won stood at 1,109.5 as of 0203 GMT, up 0.4 per cent compared with Monday’s close of 1,113.5.
The Korea Composite Stock Price Index (Kospi) was up 0.6 per cent at 2,003.54 points.
“If the Fed ends up keeping its rates unchanged for September, the won will be kept at its current level which is at around 1,100,” said June Park, a foreign exchange analyst at Daishin Economic Research Institute.
HONG KONG Shares rallied in Hong Kong Tuesday morning after a top Federal Reserve official tempered comments from two colleagues on the possibility of a US rate hike this month.
The Hang Seng Index added 1.17 per cent, or 273.53 points, to 23,564.13.
And the benchmark Shanghai Composite Index added 0.10 per cent, or 3.05 points, to 3,025.03 while the Shenzhen Composite Index, which tracks stocks on China’s second exchange, gained 0.54 per cent, or 10.71 points, to 1,987.77.
A STEEP Wall Street rebound overnight on dovish Federal Reserve comments failed to bring cheer to the Singapore stock market when it started trading on Tuesday, after a one-day public holiday.
At 9.02am, the benchmark Straits Times Index was down 39.47 points or 1.37 per cent at 2,833.86.
Some 92.4 million shares worth S$99.6 million were traded, with losers outpacing gainers 151 to 34.
Elsewhere in Asia, stocks joined the US equity rebound in the morning trading on the back of a continued dovish tone from Fed policymaker Lael Brainard in her approach to US monetary policy. This followed a sell-off on Monday stoked by rising bond yields and talk that US rates might rise as early as next week.
STOCKS to watch on Tuesday include:
Global Logistic Properties (GLP): The second-largest owner of US industrial real estate agreed to buy US$1.1 billion of warehouses from Hillwood Development Co. It expects to complete a US$700 million deal for fully leased properties in December, the company said. On Monday, GLP also said it will develop a 27,000-square-metre modern logistics property in Osaka at a development cost of around five billion yen (S$66.8 million).
CWT: The logistics company said a subsidiary under its financial services arm, Straits Financial Group, has been granted the full capital market services licence for trading in futures contracts by the central bank.
This allows the subsidiary, Straits Financial Services Pte Ltd (SFSPL), to offer a full and complete suite of financial and commodity derivatives, including centrally cleared over-the-counter contracts and contracts-for-differences. SFSPL will also be able to expand its customer base beyond the “accredited investors” and “corporate expert investors” category.
The currency market has shifted to signal expectations the Monetary Authority of Singapore will refrain from easing next month, with a measure of the local dollar’s potential direction sliding to a four-year low.
Six-month forwards stumbled to minus 15.64 points on Thursday, the least since July 2012, data compiled by Bloomberg show. The rate touched 32.23 points on June 28, days after the UK vote to exit the European Union caused a global financial rout.
Futures contracts show the likelihood for the US Federal Reserve to raise interest rates at the Sept 20-21 meeting has gone down to 22 per cent after recent disappointing US economic data.
“The market is not looking at Singapore dollar depreciation at this point because of what’s happening in the US,” said Irene Cheung, a foreign-exchange strategist at Australia & New Zealand Banking Group Ltd in Singapore.
Taiwan stocks fell to about a one-week low on Friday as TSMC and other Apple Inc suppliers tracked losses in Apple shares after the iPhone 7 failed to impress Wall Street.
As of 0326 GMT, the main Taiex index fell one per cent to 9,169.69, after closing at 9,262.89 in the previous session.
Taiwan Semiconductor Manufacturing Co (TSMC), the world’s biggest contract chip maker, dipped 1.4 per cent. Hon Hai Precision was off 0.9 per cent.
The electronics subindex sank one per cent, while the financials subindex lost 1.2 per cent.
The Taiwan dollar softened NT$0.094 to NT$31.380 per US dollar.
Asian stocks fell as investors weighed the outlook for monetary policy in the US and Japan after the European Central Bank downplayed the need for more economic stimulus. South Korean shares dropped amid concern North Korea may have conducted a nuclear test.
The MSCI Asia Pacific Index dropped 0.7 per cent to 141.03 as of 10:49am in Tokyo. The measure is heading for a 2.1 per cent advance this week as traders pared bets the Federal Reserve will raise rates at its September meeting while speculation swirled over whether the Bank of Japan will add to already record stimulus.
Shares in the US and Europe fell after ECB chief Mario Draghi played down the prospect of an increase in asset purchases at a time when concern over the impact of Brexit on the euro area is mounting.
“While the ECB disappointed, we could still expect additional stimulus later in the year as there’s so much uncertainty in Europe,” James Woods, a strategist at Rivkin Securities in Sydney, said by phone.
South Korean shares and won fell early on Friday following a suspected North Korean nuclear test.
South Korea’s presidential Blue House will hold a National Security Council meeting at 0200 GMT on Friday after seismic activity was detected near North Korea’s known nuclear test site, activity South Korea said could have been a nuclear test.
The Korea Composite Stock Price Index (Kospi) was down 1.2 per cent at 2,038.21 points as of 0201 GMT.
The won was quoted at 1,100sw.1, down 0.7 per cent compared to Thursday’s close of 1,092.6.