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.
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.
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.
The US dollar took a tumble and Asian stocks rose to one-year highs on Wednesday after surprisingly weak US services sector activity put paid to already slim chances of an interest rate hike by the Federal Reserve as early as this month.
MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.4 per cent, extending its chunky gains of 2.7 per cent over the last two days, to claim a level last seen in July last year.
“When people think there’s no immediate rate hike from the Fed, then Asia and emerging markets are the place to go to, as investors seek yields,” said Toru Nishihama, senior economist at Dai-ichi Life Research.
Japan’s Nikkei slid 0.7 per cent, however, as the yen gained sharply versus the US dollar, putting more pressure on exporters in the world’s third-largest economy.
MALAYSIA share prices opened lower on Wednesday with the FTSE Bursa Malaysia Kuala Lumpur Composite Index down 9.420 points to 1,680.350.
Volume was 40.024 million lots worth RM39.73 million.
Gainers outnumbered losers 92 to 70.
Australian shares edged lower on Tuesday, led by losses in the financial sector as markets were largely resigned to the prospect of the Reserve Bank of Australia keeping rates steady at its policy meeting later in the day.
The S&P/ASX 200 index was down 20.68 points, or 0.4 per cent, at 5408.8 by 0240 GMT, pulling back slightly from a 1.1 per cent gain on Monday.
“The market is marking time to see the results from the Reserve Bank,” said James McGlew, executive director of corporate stockbroking at Argonaut.
“The chance of another rate cut is very slim indeed. I think the markets would be very surprised if there is a rate cut today.”
American International Group has raised about HK$1.49 billion (S$261.34 million) by selling its remaining shares in Chinese insurer PICC Property and Casualty Co Ltd, IFR reported.
AIG sold 111 million shares at HK$13.46 each after marketing the deal at a floor price of HK$13.39. The shares ended Friday at HK$13.46.
AIG bought PICC P&C shares ahead of the Chinese insurers’Hong Kong IPO in 2003 and has been steadily selling down its shares over the past two years.
Including the latest sale, the US insurer has raised about US$2.8 billion, according to Reuters calculations.
AIG did not respond to Reuters’ request for comment, while PICC P&C could not be reached.