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Asian Economic News
Asian Stocks Drop Ahead Of Fed Meeting
11/3/2009 4:56 AM ET
(RTTNews) -
Asian stocks mostly edged lower on Tuesday on concerns stimulus measures if withdrawn prematurely may undermine a global economic recovery.
After a fairly positive opening, most of the markets in the region drifted lower, with participants choosing to tread cautiously ahead of interest rates announcements from the U.S, U. K and Eurozone this week.
The Reserve Bank of Australia raised its interest rates by 25 basis points to 3.5 percent, but said it may pause its tightening cycle in December. Traders look forward to the outcome of the two-day monetary policy meeting from the U.S. Federal Reserve which starts Tuesday. The Japanese market was closed for a holiday.
China's benchmark Shanghai Composite index, which tracks both A and B shares, ended up 1.2% or 38 points at 3,114 on optimism about manufacturing growth in the fourth quarter after a report by Caijing magazine showed the country's four big banks ramped up lending last month. Listed companies that hold a stake in China Merchants Securities advanced after the latter started the roadshow Tuesday for an initial public offering to raise around CNY10 billion.
However, the Hong Kong market fell sharply, dragged down by banks and property developers. The benchmark Hang Seng index closed at 21,240, down 380 points or 1.76%. The IMF said Tuesday it expects Hong Kong's gross domestic product to contract 2.0% this year versus a 3.5% decline it previously forecast.
The Australian market pared its initial gains to end mostly unchanged amid the interest rate decision. The benchmark S&P/ASX 200 closed at 4,531, down 9 points or 0.2% and the broader All Ordinaries index fell 0.13% to 4,540.
Big miner BHP Billiton and its rival Rio Tinto ended almost flat in positive territory. However, gold miners Lihir Gold and Newcrest Mining advanced by around 4% each after the precious metal rose to a record high.
Banking stocks closed mixed. National Australia Bank fell 1.76% and Westpac Banking Corp shed 0.63% ahead of its full-year earnings announcement on Wednesday, but Commonwealth Bank rose 0.73% and ANZ ended flat.
In the energy sector, Woodside Petroleum fell 1.12% and Santos slipped 0.27%, while Oil Search closed unchanged.
QBE Insurance fell nearly 4% after it cut back its projected insurance revenue growth. Macmahon Holdings surged up 7.48% and Leighton advanced 1.43% after they agreed to extend a memorandum of understanding over the partnering on large infrastructure projects. Department store chain Myer gained some lost ground after its plunge on debut on Monday.
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