ASIA MARKETS: Asian Stocks Decline, With Fed Rate Decision In The Pipeline
By Dow Jones Newswire
Automakers boost Nikkei; ZTE plunges in Hong Kong
Asian shares moved broadly lower Wednesday, ahead of key decisions from central banks in the U.S. and Europe that are expected to further unwind stimulative policies that fueled an economic rebound over the past decade.
Japan's Nikkei 225 was the largest regional index finish higher, rising 0.4%. That move was aided by automakers such as Toyota and Honda , which rose 1.3% and 1.2%, respectively. But Nintendo slid 6.2% after announcing the popular videogame "Fortnite" would be available on its Switch console .
Investors appeared to avoid making major moves before announcements from the Federal Reserve and European Central Bank this week that could shape the next leg of the global economic recovery that began in the wake of the financial crisis 10 years earlier.
While several market participants said they expect both central banks to proceed with plans that have been well-choreographed to the market, investors worry about a potential policy misstep, such as raising interest rates too aggressively, that could cause an economic stumble.
"Investors don't like surprises," said David Campbell, a principal with Bingham, Osborn & Scarborough, a San Francisco-based financial advisory firm that oversees $4.2 billion. "I'm keeping an eye on inflation and interest rates that are relative to that. Surprises with either of those can throw things off a bit."
China's stock benchmark in Shanghai fell 1%, giving back some of Monday's outperformance. That came as the People's Bank of China said it was removing a rule that limits the amount of funds that so-called qualified foreign institutional investors can take out of China every month. That led to some apprehension of overseas players boosting any selling, said UOB Kay Hian's Ivan Ip.
Hong Kong's Hang Seng index dropped 1.2%, as Chinese telecommunications equipment and systems company ZTE plunged 41.6% in the resumption of trading following a two-month trading halt . That wiped out nearly $8 billion in market value. The trading halt followed an order from the U.S. Commerce Department banning American companies from selling to ZTE for what it said was the company's failure to honor an earlier agreement to resolve its sanctions violations.
Australian stocks fell 0.5%, despite APA Group 21% surge after Hong Kong's CK International made a bid worth more than $9 billion for the pipeline operator.