Asian markets mixed after Fed keeps rates unchanged; Nikkei slides for 6th day
HONG KONG — Asian markets were mixed Thursday as investors took a cautious approach after the U.S. Federal Reserve left interest rates unchanged.
Stocks in Japan, China, and South Korea closed largely flat, while Hong Kong, Taiwann, Singapore and Thailand shares fell. Australian and Indian benchmarks led the region's gainers.
Though the Fed was widely expected to keep the benchmark federal funds rate at 2 per cent, its mixed assessment of the world's largest economy left some investors uneasy. In a brief statement, U.S. central bank officials said there were a few positive economic signs, including "some firming in household spending," but warned rising energy prices could spur inflation and limit growth.
"Sentiment was sluggish as the Fed's statement on the state of the U.S. economy was ambiguous," said Kazuki Miyazawa, market analyst at Daiwa Securities SMBC Co. Ltd. in Tokyo.
In Hong Kong, investors dumped export-related shares on worries over shrinking demand from U.S. consumers.
Retail goods and textile exporter Li & Fung plunged 6.7 per cent after Merrill Lynch downgraded the company's stock. Clothing maker Esprit Holdings dropped 3.5 per cent.
Mobile phone maker Foxconn International Holdings, Motorola's primary contract manufacturer, shed more than 5.3 per cent.
Banks were a bright spot after the Hong Kong Monetary Authority left its base rate unchanged in unison with the Fed's decision. The territory's banks often match U.S. rate changes as the Hong Kong currency is pegged to the U.S. dollar.
Oil stocks, meanwhile, declined along with crude prices on news that U.S. stockpiles of oil and fuel were larger than expected. Upstream producer CNOOC lost 1.9 per cent, and PetroChina slid 1.3 per cent.
Oil stood at US$134.35 a barrel in electronic trading on the New York Mercantile Exchange by midday in Singapore Thursday after falling more than US$2 in New York Wednesday.
In Tokyo, the benchmark Nikkei 225 index edged down 0.05 per cent to 13,822.32, extending losses for a sixth day.
Japan's top automaker, Toyota Motor Corp., rose 0.2 per cent, and its rival Nissan Motor Co. was 0.4 per cent higher. The country's top oil refiner Nippon Oil Corp. dropped 3.1 per cent.
Sony Corp. rose 2.8 per cent. The company on Thursday outlined its strategy for growth geared at regaining its lead in TVs, wiping out the red ink in video games and investing 1.8 trillion yen (US$16.7 billion) in future technology.
Mainland China's most-watched index was virtually unchanged following a modest rally this week on bargain-hunting. The benchmark Shanghai Composite Index closed down 0.1 per cent at 2,901.85 points.
Analysts have been forecasting a decline in prices amid fears about the impact on corporate profits of high oil prices and a possible interest rate hike to tamp down inflation.
The market is near 15-month lows and down about 50 per cent from its all-time high in October. That prompted bargain-hunting Wednesday that pushed up the Shanghai index by 3.6 per cent.
Shares in China Southern Airlines, the country's biggest carrier by passenger numbers, rose by 5.2 per cent after high oil prices eased slightly Wednesday on Asian markets.
Analysts have been expecting the government to take steps to boost investor confidence. On Wednesday, regulators ordered publicly traded companies to improve governance by improving information disclosure to shareholders and taking steps to prevent embezzlement.
Elsewhere, Australia's S&P/ASX200 index climbed 1.3 per cent as banking stocks recovered. India's Sensex index rose 1.4 per cent.
In currency trading, the dollar stood at 108.14 yen mid-afternoon in Tokyo, up from 107.89 yen in New York late Wednesday. The euro stood at US$1.5637 mid-afternoon in Tokyo compared with US$1.5664 in New York.
The greenback stood at 1.3660 Singapore dollars and 33.35 Thai baht.
