By Ese Erheriene
Global stocks lacked direction at the beginning of the week, with some markets in Asia ignoring a positive lead from the U.S. as local drivers took precedence.
Trading was subdued at the start of what stands to be an action-packed week, with the Federal Reserve and the Bank of Japan set to make interest rate decisions. According to CME Group data, there is an 88.6% probability of the Fed raising rates.
“The market is seeing more domestic [factors] driving things,” said Jingyi Pan, a market strategist at IG Group. On Friday, U.S. stocks gained, with the Dow Jones Industrial Average ending up 0.2% following a stronger-than-expected jobs report.
In Hong Kong, shares of HSBC Holdings PLC /zigman2/quotes/202687335/delayed HK:5 -1.01% were recently 1.3% higher after the global bank said AIA Group Ltd. Chief Executive Mark Tucker would become chairman on Oct. 1, replacing Douglas Flint. Tucker will lead the process of identifying a successor to Chief Executive Stuart Gulliver. The broader Hang Seng Index /zigman2/quotes/210598030/delayed HK:HSI -0.80% was up 0.4%.
Early Monday, Australia’s S&P/ASX 200 /zigman2/quotes/210598100/delayed AU:XJO -0.21% was down 0.3% as U.S. crude oil prices slipped below $48 a barrel for the first time this year. U.S. crude futures were recently off 0.7% at $48.14 a barrel, while the global benchmark, Brent, was down 0.5%. Oil Search was recently down 1.7%, Woodside Petroleum fell 0.9% and Santos /zigman2/quotes/207349564/delayed AU:STO +2.32% was 1.4% lower.
“With the market still digesting the big increase in [U.S.] inventories, oil prices are likely to remain under pressure today,” ANZ Research analysts said.
Meanwhile, the Nikkei Stock Average /zigman2/quotes/210597971/delayed JP:NIK -0.96% was up 0.2% after opening lower, as the yen weakened against the U.S. dollar and oil consumers benefited from lower prices.
Chemical, airline and power companies were among those benefiting, with Sumitomo Chemical /zigman2/quotes/209461289/delayed JP:4005 -1.58% up 2.1%, while Japan Airlines /zigman2/quotes/202202214/delayed JP:9201 -0.79% gained 1.1% and Chubu Electric Power /zigman2/quotes/208115192/delayed JP:9502 +0.14% rose 1.5%. Analysts say lower energy costs are a net positive for resource-scarce Japan.
The Nikkei also shrugged off a worse-than-expected machinery orders report, which had weighed at the start of the trading session. Core machinery orders, a leading indicator of business investment, fell 3.2% from the previous month, following a revised increase of 2.1% in December. The result compared with a decline of 0.5% expected by economists surveyed by Nikkei.
In South Korea, markets continued to rally after scandal-plagued President Park Geun-hye was removed from office on Friday.
“[The impeachment] added a lot of positive sentiment to the Korean equity market,” said Woon Tian Yong, an investment analyst at Phillip Futures in Singapore. “Confidence is restored…as this big uncertainty is removed.”
In currencies, the yen was down 0.1% against the dollar, which added some buoyancy to local stocks.