By V. Phani Kumar, MarketWatch
HONG KONG (MarketWatch) — Chinese and South Korean stocks fell Wednesday on caution ahead of the Federal Reserve’s monetary-policy decision later in the day, while Japanese shares rallied in the wake of strong overnight gains on Wall Street.
The Nikkei Stock Average /zigman2/quotes/210597971/delayed JP:NIK -0.79% outperformed regional markets by a wide margin, finishing the day 1.8% higher. Australia’s S&P/ASX 200 /zigman2/quotes/210598100/delayed AU:XJO -2.31% gained 1%.
Their performance followed another triple-digit-point gain for the Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA -3.15% Tuesday, as the Federal Open Market Committee began its two-day policy meeting.
On the downside, the Shanghai Composite /zigman2/quotes/210598127/delayed CN:SHCOMP -0.83% fell 0.7% to 2,143.45, the benchmark’s lowest finish since mid-December. Hong Kong’s Hang Seng Index /zigman2/quotes/210598030/delayed HK:HSI -0.73% dropped 1.1%, and South Korea’s Kospi /zigman2/quotes/210598069/delayed KR:180721 -1.28% declined 0.7%.
Tokyo Stock Exchange Enlarge Image
Traders said the FOMC decision and Fed Chairman Ben Bernanke’s press conference later Wednesday will likely to remove a key source of uncertainty that has affected markets of late in terms of how long the central bank will maintain its $85 billion a month in bond purchases.
“So, if investors get a completely clear picture of where the FOMC is heading, bargain-hunting is on,” said IG Markets strategist Evan Lucas.
However, “if the Fed should surprise the market with tapering talk, all bets are off,” he said.
Some other analysts said that even if the Fed doesn’t immediately signal its intention to downsize the quantitative-easing program — the QE has been a key tailwind behind global equity markets for several quarters — concerns that it will eventually do so may still have an impact.
“Although we don’t expect the Fed to decide to scale back its asset purchases today, we do think the prospect of an eventual tapering will continue to dampen capital inflows into emerging-market equities in particular, as it undermines investors’ appetite for risk,” John Higgins at Capital Economics wrote to clients.
In Japan, shipping stocks posted hefty gains, with utilities, steel makers and financials also making strong advances.
Shares of Kawasaki Kisen Kaisha Ltd. /zigman2/quotes/206655821/delayed JP:7012 -0.95% /zigman2/quotes/200808822/delayed KWHIY -1.58% soared 9.5%, JFE Holdings Inc. /zigman2/quotes/204336633/delayed JP:5411 +1.14% /zigman2/quotes/203557603/delayed JFEEF -7.70% climbed 6.4%, and Sumitomo Mitsui Financial Group Inc. /zigman2/quotes/203656770/delayed JP:8316 -1.15% /zigman2/quotes/206471416/composite SMFG -1.08% added 5.2%.
Camera manufacturers rose in the wake of a Nikkei newspaper report that the top eight digital-camera makers are poised to get on the path to recovery, with majors Canon Inc. and Nikon Corp. anticipating strong profit growth.
The Next 24: Markets await Fed
Everyone is waiting for the Fed statement and press conference, while bellwether FedEx is due to report before the bell. Photo: AP
Canon /zigman2/quotes/207639533/delayed JP:7751 +3.58% /zigman2/quotes/210242912/composite CAJ +3.08% climbed 2.4%, and Nikon /zigman2/quotes/203281219/delayed JP:7731 +0.09% /zigman2/quotes/209396469/delayed NINOY +0.05% gained 1.7%.
In Sydney, shares of News Corp. /zigman2/quotes/209121543/delayed AU:NWS -4.94% /zigman2/quotes/204787942/composite NWS -5.67% tumbled 6.9% as the stock traded following the spin-off of the media group’s publishing assets. The company has retained the group’s entertainment assets.
Meanwhile, shares of New Newscorp Inc. — the company which holds the group’s publishing assets, including MarketWatch, the publisher of this report — was down 45 Australian cents at A$14.55 ($13.82) in heavy volumes as it began trading for the first time.
Losses were spread across sectors in Hong Kong, with shares of China Coal Energy Co. /zigman2/quotes/201486584/delayed HK:1898 +0.77% /zigman2/quotes/205321671/delayed CCOZY -1.24% falling 3.4%, China Construction Corp. /zigman2/quotes/208974133/delayed HK:939 -0.63% /zigman2/quotes/207732534/delayed CICHY -0.44% dropping 2.5%, and telecommunications firm China Unicom Hong Kong Ltd. /zigman2/quotes/205091392/delayed HK:762 -2.47% /zigman2/quotes/205476740/composite CHU -2.39% shedding 2.5%.
Shares of heavyweight HSBC Holdings PLC /zigman2/quotes/202687335/delayed HK:5 -0.80% slipped 0.4% after the Hong Kong Monetary Authority Tuesday said it was investigating HSBC and other banks over the possible rigging of local benchmark interest rates.
Financial stocks were mostly lower in Shanghai, meanwhile. Shares of China Citic Bank Corp. /zigman2/quotes/204346887/delayed CHBJF -18.18% /zigman2/quotes/206411273/delayed CN:601998 +0.18% dropped 1.8%, China Life Insurance Co. /zigman2/quotes/204766889/delayed CN:601628 -0.39% /zigman2/quotes/206573290/composite LFC -2.11% fell 1.1%, and Citic Securities Co. /zigman2/quotes/210326178/delayed CN:600030 -1.98% /zigman2/quotes/207216844/delayed CIIHF -8.45% retreated 0.6%.
Several gold miners fell after the precious metal’s futures suffered a sharp price decline in the U.S. amid uncertainty related to the Fed’s monetary stimulus.
Perseus Mining Ltd. /zigman2/quotes/205179925/delayed AU:PRU -2.77% /zigman2/quotes/202190906/delayed PMNXF +0.48% tumbled 6.6% shed 0.5% in Sydney, Zhaojin Mining Industry Co. /zigman2/quotes/203361399/delayed HK:1818 +1.60% /zigman2/quotes/200275285/delayed ZHAOF +0.77% fell 2.6% in Hong Kong, and Zijin Mining Group Co. /zigman2/quotes/204517000/delayed HK:2899 -0.82% /zigman2/quotes/209836076/delayed ZIJMF -9.61% lost 2.1% in Shanghai.