By Marketwatch and Associated Press
Asian stock markets were mixed Wednesday, as traders mulled a largely expected Federal Reserve interest-rate hike, though uncertainty over what’s next there, as well as weaker-than-expected Japanese trade data.
Japan’s Nikkei 225 index /zigman2/quotes/210597971/delayed JP:NIK -1.06% fell 0.6% after data showed export growth stalled last month.
Shares of SoftBank Corp., the mobile unit of tech giant SoftBank Group /zigman2/quotes/207303954/delayed JP:9984 -0.38% , fell around 10% at one point, following its massive initial public offering, which sought to raise about $18 billion. Shares closed down 0.9%. Tech companies Advantest /zigman2/quotes/206869087/delayed JP:6857 +0.87% and Fujitsu /zigman2/quotes/208459594/delayed JP:6702 -1.29% rose more than 2%, while energy and utiity stocks fell. Oil company Inpex /zigman2/quotes/206689846/delayed JP:1605 -4.84% dropped 7% and Tokyo Gas /zigman2/quotes/204721803/delayed JP:9531 -0.47% fell 4.3%.
On Wednesday, Japan reported that its trade balance in November was a deficit of 737.3 billion yen, from 450.1 billion yen in the previous month. This is its fourth deficit in last five months. The country’s exports broadly slowed, partly due to weakening demand from China. Japanese exports rose 0.1% from a year earlier, as compared to October’s 8.2% gain. This fueled concerns about the impact of the US-China trade dispute on the world’s third-largest economy.
Hong Kong’s Hang Seng /zigman2/quotes/210598030/delayed HK:HSI -1.84% was 0.2% higher. Casino operators Sands China /zigman2/quotes/207609245/delayed HK:1928 -0.49% and Galaxy Entertainment /zigman2/quotes/202884203/delayed HK:27 -1.65% gained more than 1% each, while energy names dropped amid the recent plunge in oil prices. China Petroleum /zigman2/quotes/202085942/delayed HK:386 -2.29% fell 4.7% and CNOOC /zigman2/quotes/203421416/delayed HK:883 -1.48% eased 2%.
Stocks fell in mainland China, with the Shanghai Composite index /zigman2/quotes/210598127/delayed CN:SHCOMP -1.95% down 1% and the smaller-cap Shenzhen Composite /zigman2/quotes/210598015/delayed CN:399106 -0.31% fell 1.4%. South Korea’s Kospi /zigman2/quotes/210598069/delayed KR:180721 -0.81% rose 0.8% as Samsung /zigman2/quotes/209800866/delayed KR:005930 -0.19% rose modestly. Australia’s S&P ASX 200 /zigman2/quotes/210598100/delayed AU:XJO -0.61% gave up 0.2%. Shares were higher in Taiwan and Southeast Asia.
On Tuesday, most U.S. indexes broke a two-day losing streak as technology and consumer-focused companies climbed. Energy stocks plummeted along with crude oil, which reached its lowest price since August 2017. The broad S&P 500 index /zigman2/quotes/210599714/realtime SPX +1.05% added 0.22 points to 2,546.16. The Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA +1.44% gained 0.4 percent to 23,675.64 and the Nasdaq composite /zigman2/quotes/210598365/realtime COMP +0.66% was up 0.4 percent at 6,783.91.
The Fed is widely expected to raise its short-term interest rate after a meeting ends Wednesday. It is expected to raise the rate — used as a benchmark for many consumer and business loans — by a modest quarter point to a range of 2.25% to 2.5%. The central bank has forecast three more hikes in 2019, but investors doubt it would go as planned. Higher rates can slow economic growth and the U.S. economy is expected to cool off in 2019. China and Europe have also suggested that growth is slowing.
“Positive signals on the trade war front are stabilizing risk in Asia,” Stephen Innes of OANDA said in a note. “Indeed, this is market in need of some good news and while trade remains a work in progress investors are at least taking some comfort that a resolution roadmap could be in place as soon as March 2019.”
Oil prices bounced back slightly after plunging on worries about rising supplies and weakening global growth, which could weigh on demand. Benchmark U.S. crude gained 12 cents to $46.72 a barrel in electronic trading on the New York Mercantile Exchange. The contract, which has fallen almost 40 percent since October, gave up $3.60 to $46.60 on Tuesday. Brent crude , used to price international oils, added 34 cents to $56.60 a barrel. It lost $3.35 to $56.26 a barrel in London.
The dollar /zigman2/quotes/210561789/realtime/sampled USDJPY -0.2668% weakened to ¥112.39 yen during Asian trading from ¥112.52 yen in late trading Tuesday.
“The dollar has been on offer throughout the Asia session as traders start aggressively pricing what is expected to be a dovish Fed hike,” Innes said. “Indeed it’s becoming a very solid risk-reward to be short dollars heading into this Fed hike.”