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Feb. 22, 2017, 7:39 a.m. EST

Asian stocks edge up ahead of Fed minutes

Nikkei dips as yen gains

By Kenan Machado

A worker stands in "Sky100," the 100th floor of the International Commerce Centre in Hong Kong.

Asia-Pacific stocks rose broadly Wednesday, ahead of the release of minutes from this month’s U.S. Federal Reserve meeting.

But gains on some of the region’s key benchmarks were muted.

“Markets [in Asia] are in a cautious phase,” said Ric Spooner, chief market analyst at broker CMC Markets.

While most investors aren’t anticipating a rate rise from next month’s Fed meeting, future increases are widely expected to exceed the quarter-points of 2015 and 2016.

“The rhetoric on inflation has turned among Fed officials, with many now expecting the firming to continue,” said Sue Trinh, head of Asia forex strategy at RBC Capital Markets. The Fed’s last statement flagged the turn, she added, and a similar vibe is expected from this month’s.

Hong Kong’s Hang Seng Index (HONG:HK:HSI)  was a leader, up 0.99%. The index was hit Tuesday by an afternoon selloff stoked by a downbeat fourth-quarter report from HSBC (HKG:HK:5)  . The bank’s shares on Tuesday fell 5% and were off a further 0.2% Wednesday.

The day’s laggard by far was New Zealand, where earnings news helped push the NZX-50 (NZE:NZ:NZ50GR)   down 0.8%. “Stock-specific action seems to have dragged down the market,” said Greg McKenna, chief market strategist at broker AxiTrader.

Construction heavyweight Fletchers (NZE:NZ:FBU)   dropped 5.2% and Sky Network Television (NZE:NZ:SKT)   slid 2.8%.

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Elsewhere, Australia’s ASX 200 (S&P:AU:XJO)   and South Korea’s Kospi (KOREA:KR:180721)   each rose 0.2%, while the Japan’s Nikkei (NIKKEI:JP:NIK)   eased by less than 2 points as the yen (XTUP:USDJPY)  gained modestly against the dollar. Its weakness Tuesday had helped lift Japanese shares. The dollar was recently around ¥113.15, versus ¥113.70 earlier Wednesday.

Lower yields on Japanese government bonds weighed on financial stocks, which logged modest declines. But steelmakers continued to rally amid hopes that metals prices will continue rising. JFE (TKS:JP:5411)   rose 3% and Nippon Steel & Sumitomo Metal (TKS:JP:5401)   added 1.8%, both to 18-month highs.

In the oil patch, futures extended overnight gains in Asian trading. Tuesday’s advance during European trading came after leaders of the Organization of the Petroleum Exporting Countries affirmed that their production-cut deal is being implemented.

April Brent oil futures, after rising nearly 1% Tuesday, are up nearly 0.5% more to $57 a barrel, just shy of the highest close this year.

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