Asian shares fluctuated before ending mostly higher on Tuesday, as investors awaited the results of a two-day policy meeting of the U.S. Federal Reserve to find the probability of any further stimulus announcement.
With political turmoil and disappointing economic data undermining investor risk appetite, traders are hoping that the Fed might give some clues concerning a third-round of bond purchases at the meeting commencing today.
Unsettling political and economic news from Europe weighed on markets early in the session, dragging key indexes in Malaysia, South Korea and Japan down between 0.1 percent and 0.8 percent.
Japanese shares fell for a fourth straight day, as political and economic uncertainties in Europe coupled with the yen's strengthening weighed on sentiment. Investors also awaited the outcome of the Bank of Japan's policy meeting on Friday and a slew of corporate earnings later this week. The Nikkei average lost 0.8 percent, while the broader Topix index shed 0.7 percent.
Export-related shares bore the brunt of the selling, with Europe-focused Canon and Sony falling 1-2 percent, while Hitatchi lost 2.7 percent and TDK eased 0.8 percent. Renewed fears of a deepening European debt crisis weighed on financial stocks after Mark Rutte, Netherlands' Prime Minister, resigned yesterday in a crisis over budget cuts. Nomura Holdings and Daiwa Securities Group ended down over 2 percent each.
Advantest jumped 4.5 percent on a Nikkei report that it would return to an operating profit in the quarter ended March after a string of money-losing periods. Likewise, Nippon Airways soared 4.1 percent after the carrier lifted its earnings and revenue forecast for fiscal 2011, citing strong demand in tourism as well as lower operating expenses.
Australian shares ended largely unchanged with a positive bias as lower-than-expected inflation data bolstered expectations of an interest rate cut by the Reserve Bank of Australia next week. The benchmark S&P/ASX 200 index rose 0.2 percent, while the broader All Ordinaries index edged up 0.1 percent.
Consumer prices in Australia rose 1.6 percent from a year earlier in the first quarter of 2012, the Australian Bureau of Statistics said today - well below estimates for 2.2 percent after rising 3.1 percent in the fourth quarter of 2011.
On a quarterly basis, inflation added just 0.1 percent - also below forecasts for a 0.6 percent rise following the flat reading in the previous three months. The weaker than expected showing reinforced the view of many economists that the central bank will hike interest rates from the current 4.25 percent at next week's monetary policy meeting.
Banks led the gainers, with ANZ rising 1.1 percent and Westpac moving up 1.5 percent, while Commonwealth and NAB ended about half a percent higher each. Gold miner Newcrest Mining tumbled 3.6 percent after it cut 2012 production forecasts, citing under-investment and wet weather. BHP Billiton edged down 0.7 percent, Rio Tinto lost 1.6 percent and Fortescue dropped 1.9 percent, as weak economic readings from China and the euro zone cast doubt on the strength of global metal demand.
Wesfarmers rose 1.8 percent after the owner of Coles supermarkets reported a five percent increase in its third-quarter Coles sales despite tough trading conditions. Harvey Norman and Myer gained around 2 percent each amid expectations that lower interest rates will lift consumer spending.
South Korea's Kospi average tracked the losses overnight on Wall Street to end half a percent lower. Resource stocks bore the brunt of the selling, with Korea Zinc tumbling 5.8 percent. LG Electronics soared almost 5 percent on short covering ahead of its earnings announcement tomorrow, while automaker Hyundai Motor rose 2.8 percent. Samsung Life Insurance jumped 3.1 percent as the life insurer said it will buy back 3 million shares to stabilize its stock price.
New Zealand's benchmark NZX-50 index rose 0.2 percent, led by Telecom as its attractive dividend yield and an ongoing share buyback program lured investors. Shares of the nation's biggest telephone company climbed 3.1 percent, while resins manufacturer Nuplex rose 1.9 percent, retailer Kathmandu Holdings gained 1.2 percent and Fletcher Building, the nation's largest construction company, ended up 0.3 percent. Rakon, which makes components for navigation systems, tumbled 4.1 percent, pacing the declines on the exchange.
Elsewhere, China's Shanghai Composite index ended little changed with a positive bias, while Hong Kong's Hang Seng index rose 0.3 percent. India's Sensex was last trading up 0.6 percent, Indonesia's Jakarta Composite index gained 0.4 percent, Singapore's Straits Times index added half a percent and the Taiwan Weighted ended up 0.2 percent, while Malaysia's KLSE Composite slipped marginally.
On Wall Street, stocks saw considerable weakness before ending the session well off their worst levels of the day overnight, as economic and political uncertainty in Europe coupled with a report alleging that Wal-Mart Stores stymied an investigation of bribery in Mexico spooked investors. The Dow and the S&P 500 closed down about 0.8 percent each and the tech-heavy Nasdaq shed a percent.
by RTT Staff Writer
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