Asia-Pacific Shares

Asia-Pacific Shares: Steady-to-Better is Early Call as Investors Digest Fed Minutes

Asia-Pacific shares are expected to rise slightly on the opening on Thursday, reflecting the price action in the U.S. market.

On Wall Street, the S&P 500 and the Dow closed modestly higher and Treasury yields reversed slightly losses after the Federal Reserve, in minutes of its latest meeting, said that the economic recovery remains far from complete despite showing signs of progress. The tech-weighted NASDAQ ended the session nominally lower, and economically sensitive small caps and transports dipped into the close.

European stocks inched lower, closing below record highs, while optimism over speedy inoculations and the soft British Pound powered the UK’s exporter-laden FTSE’s 0.9% advance.

Ahead of the Asia-Pacific opening, investors are digesting the Fed minutes, released at 18:00 GMT. The minutes from the Fed’s most recent monetary policy meeting, in which the participants expressed caution about ongoing risks of the pandemic and reiterated the Fed’s commitment to an accommodative stance until the rebound was more secure.

Wednesday Recap

The major Asia-Pacific markets traded mostly higher on Wednesday but shares on the Chinese mainland and in Hong Kong lost ground.

China Shares Dip as Distillers Lead Consumer Slump

China’s main equity gauges fell on Wednesday with consumer firms dragging the market lower, as investors continued to worry that strong economic data could lead to possible policy tightening.

Analysts say that strong economic data could prompt authorities to tighten policy, putting pressure on equity valuations. “We can’t rule out the possibility that policymakers may move as early as late this year to tighten monetary policy, potential triggering knock-on effects in both the real economy and financial markets,” Christina Zhu, economist at Moody’s Analytics said in a note.

Hong Kong’s Hang Seng Falls as Tech Firms Dip

Hong Kong’s Hang Seng Index fell on Wednesday in its first trading session after an extended holiday as tech heavyweights and financials dragged it lower.

Index heavyweight Tencent dropped 3.75% and was the biggest drag on the Hang Seng for the day. It fall pushed the TECH Index down 1.37% and the IT sector down 2.4%.

Shares of Lenovo Group also dragged on the TECH Index, falling 4.07% for a third consecutive session of declines after the PC maker settled a multi-year patent fight with Finland’s Nokia.

For a look at all of today’s economic events, check out our economic calendar.

Published by

James Hyerczyk

James A. Hyerczyk has worked as a fundamental and technical financial market analyst since 1982. His technical work features the pattern, price and time analysis techniques of W.D. Gann.