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Asian stocks slip, Fed's decision day makes investors wary

Reuters  |  HONG KONG 

By Saikat Chatterjee

(Reuters) - Asian stocks slipped on Wednesday as investors took profits before a U.S. central policy meeting that could signal how much monetary tightening to expect during the remainder of the year, with an immediate fully priced in by

Though recent data, particularly out of China, has fueled a rally in Asian equities since the start of the year, investors are expecting more headwinds for emerging due to an increasingly hawkish Fed.

"The positive sentiment towards emerging is not sustainable as the differential advantage in Asia's favor is likely to reduce in the coming months," said Frances Cheung, head of rates strategy for Asia ex-Japan at Societe Generale in

The MSCI's broadest index of Asia-Pacific shares outside Japan was down 0.3 percent after posting its second-biggest daily gain this year in the previous session.

Japan's benchmark Nikkei average was down 0.3 percent while stocks in South Korea and Australia declined 0.2 and 0.5 percent respectively.

Equities have had a good start to the week thanks to positive out of the region's two economic powerhouses, China and India.

Strong data out of China this week have sparked a fresh rally in stocks, while Indian shares climbed to a record high on Tuesday as investors regarded Prime Minister Narendra Modi's landslide victory in the northern state of Uttar Pradesh as an endorsment for his economic reforms.

A worrying drop in oil prices, hoever, has cast doubt on how much Asian policymakers are likely to raise interest rates this year to maintain their premium over U.S. rates.

Brent crude has lost more than 11 percent in the past three weeks despite a 1.2 percent bounce on Wednesday.

U.S. oil prices jumped in early trading after industry data showed a surprise drawdown in U.S. crude stockpiles. West Texas Intermediate crude was up 1.4 percent at $48.40 a barrel.

Policy decisions at the of England and the Japanese central along side a Dutch election vote within the next 36 hours were further reasons for investors' caution.

Despite the fresh optimism in equities, currency were far more circumspect with the edging higher against major rivals ahead of a much anticipated U.S. Federal Reserve

Market attention will be squarely focused on Fed Chair Janet Yellen's comments to gauge the future path of interest rates. The Fed is widely expected to raise its benchmark later in the day, although just a few weeks ago such action had beem viewed by as unlikely.

The dollar index was a touch higher at 101.70, extending a 0.7 percent rise in the past two sessions after a bout of profit taking at the end of last week, but it remained within well worn recent ranges.

"Of course, everyone is waiting for the Fed, so we're expecting range-bound trading until we get some clear signals about expectations for the rest of the year," said Kaneo Ogino, director at foreign exchange research firm Global-info Co in Tokyo.

are also awaiting a meeting of the Group of 20 finance ministers and central bankers in the German town of Baden-Baden starting on Friday, their first meeting since Donald Trump won the U.S. presidential election.

Gold rose 0.2 percent to $1200.70 before the Fed decision.

(Reporting by Saikat Chatterjee; Editing by Simon Cameron-Moore)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

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Asian stocks slip, Fed's decision day makes investors wary

HONG KONG (Reuters) - Asian stocks slipped on Wednesday as investors took profits before a U.S. central bank policy meeting that could signal how much monetary tightening to expect during the remainder of the year, with an immediate rate hike fully priced in by markets.

By Saikat Chatterjee

(Reuters) - Asian stocks slipped on Wednesday as investors took profits before a U.S. central policy meeting that could signal how much monetary tightening to expect during the remainder of the year, with an immediate fully priced in by

Though recent data, particularly out of China, has fueled a rally in Asian equities since the start of the year, investors are expecting more headwinds for emerging due to an increasingly hawkish Fed.

"The positive sentiment towards emerging is not sustainable as the differential advantage in Asia's favor is likely to reduce in the coming months," said Frances Cheung, head of rates strategy for Asia ex-Japan at Societe Generale in

The MSCI's broadest index of Asia-Pacific shares outside Japan was down 0.3 percent after posting its second-biggest daily gain this year in the previous session.

Japan's benchmark Nikkei average was down 0.3 percent while stocks in South Korea and Australia declined 0.2 and 0.5 percent respectively.

Equities have had a good start to the week thanks to positive out of the region's two economic powerhouses, China and India.

Strong data out of China this week have sparked a fresh rally in stocks, while Indian shares climbed to a record high on Tuesday as investors regarded Prime Minister Narendra Modi's landslide victory in the northern state of Uttar Pradesh as an endorsment for his economic reforms.

A worrying drop in oil prices, hoever, has cast doubt on how much Asian policymakers are likely to raise interest rates this year to maintain their premium over U.S. rates.

Brent crude has lost more than 11 percent in the past three weeks despite a 1.2 percent bounce on Wednesday.

U.S. oil prices jumped in early trading after industry data showed a surprise drawdown in U.S. crude stockpiles. West Texas Intermediate crude was up 1.4 percent at $48.40 a barrel.

Policy decisions at the of England and the Japanese central along side a Dutch election vote within the next 36 hours were further reasons for investors' caution.

Despite the fresh optimism in equities, currency were far more circumspect with the edging higher against major rivals ahead of a much anticipated U.S. Federal Reserve

Market attention will be squarely focused on Fed Chair Janet Yellen's comments to gauge the future path of interest rates. The Fed is widely expected to raise its benchmark later in the day, although just a few weeks ago such action had beem viewed by as unlikely.

The dollar index was a touch higher at 101.70, extending a 0.7 percent rise in the past two sessions after a bout of profit taking at the end of last week, but it remained within well worn recent ranges.

"Of course, everyone is waiting for the Fed, so we're expecting range-bound trading until we get some clear signals about expectations for the rest of the year," said Kaneo Ogino, director at foreign exchange research firm Global-info Co in Tokyo.

are also awaiting a meeting of the Group of 20 finance ministers and central bankers in the German town of Baden-Baden starting on Friday, their first meeting since Donald Trump won the U.S. presidential election.

Gold rose 0.2 percent to $1200.70 before the Fed decision.

(Reporting by Saikat Chatterjee; Editing by Simon Cameron-Moore)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

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Business Standard
177 22

Asian stocks slip, Fed's decision day makes investors wary

By Saikat Chatterjee

(Reuters) - Asian stocks slipped on Wednesday as investors took profits before a U.S. central policy meeting that could signal how much monetary tightening to expect during the remainder of the year, with an immediate fully priced in by

Though recent data, particularly out of China, has fueled a rally in Asian equities since the start of the year, investors are expecting more headwinds for emerging due to an increasingly hawkish Fed.

"The positive sentiment towards emerging is not sustainable as the differential advantage in Asia's favor is likely to reduce in the coming months," said Frances Cheung, head of rates strategy for Asia ex-Japan at Societe Generale in

The MSCI's broadest index of Asia-Pacific shares outside Japan was down 0.3 percent after posting its second-biggest daily gain this year in the previous session.

Japan's benchmark Nikkei average was down 0.3 percent while stocks in South Korea and Australia declined 0.2 and 0.5 percent respectively.

Equities have had a good start to the week thanks to positive out of the region's two economic powerhouses, China and India.

Strong data out of China this week have sparked a fresh rally in stocks, while Indian shares climbed to a record high on Tuesday as investors regarded Prime Minister Narendra Modi's landslide victory in the northern state of Uttar Pradesh as an endorsment for his economic reforms.

A worrying drop in oil prices, hoever, has cast doubt on how much Asian policymakers are likely to raise interest rates this year to maintain their premium over U.S. rates.

Brent crude has lost more than 11 percent in the past three weeks despite a 1.2 percent bounce on Wednesday.

U.S. oil prices jumped in early trading after industry data showed a surprise drawdown in U.S. crude stockpiles. West Texas Intermediate crude was up 1.4 percent at $48.40 a barrel.

Policy decisions at the of England and the Japanese central along side a Dutch election vote within the next 36 hours were further reasons for investors' caution.

Despite the fresh optimism in equities, currency were far more circumspect with the edging higher against major rivals ahead of a much anticipated U.S. Federal Reserve

Market attention will be squarely focused on Fed Chair Janet Yellen's comments to gauge the future path of interest rates. The Fed is widely expected to raise its benchmark later in the day, although just a few weeks ago such action had beem viewed by as unlikely.

The dollar index was a touch higher at 101.70, extending a 0.7 percent rise in the past two sessions after a bout of profit taking at the end of last week, but it remained within well worn recent ranges.

"Of course, everyone is waiting for the Fed, so we're expecting range-bound trading until we get some clear signals about expectations for the rest of the year," said Kaneo Ogino, director at foreign exchange research firm Global-info Co in Tokyo.

are also awaiting a meeting of the Group of 20 finance ministers and central bankers in the German town of Baden-Baden starting on Friday, their first meeting since Donald Trump won the U.S. presidential election.

Gold rose 0.2 percent to $1200.70 before the Fed decision.

(Reporting by Saikat Chatterjee; Editing by Simon Cameron-Moore)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

image
Business Standard
177 22