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Asia markets gain as investors await monetary policy

Yatheendradas C.k. at 08:53 AM - Sep 18, 2017 ( ) Views: 161

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Sep 18, 2017 07:31 AM IST | Source: CNBC

Asia markets gain as investors await monetary policy cues later this week

South Korea's benchmark Kospi index rose 0.46 percent in early trade, with technology stocks driving broader gains on the index: Samsung Electronics was up 1.07 percent and SK Hynix rose 2.72 percent in early trade. Automakers and manufacturing names were mixed.

Asian shares gained on Monday as investors anticipated clues on the direction of monetary policy from central banks later in the week.

South Korea's benchmark Kospi index rose 0.46 percent in early trade, with technology stocks driving broader gains on the index: Samsung Electronics was up 1.07 percent and SK Hynix rose 2.72 percent in early trade. Automakers and manufacturing names were mixed.

Down Under, the S&P/ASX 200 tacked on 0.55 percent. The heavily-weighted financials sub-index was up 0.97 percent. The energy and utilities sub-indexes also made significant gains in early trade.

Japan markets are closed for a public holiday.

 
 

The Federal Open Market Committee will meet this week, with an interest rate decision expected Thursday local time. Markets do not anticipate an interest rate hike at the central bank's September meeting, but will be looking for more details on plans to unwind its balance sheet.

"[D]raining the economy of cheap money can't be viewed as a positive for markets accustomed to feeding off central bank largess. Why investors are so complacent is a mystery, but perhaps the reality check will set in midweek," said Stephen Innes, APAC head of trading at OANDA, in a note.

Markets also digested soft U.S. economic data released Friday before the Fed's meeting. Retail sales fell 0.2 percent in the month of August compared to the 0.1 percent rise forecast in a Reuters poll. Industrial production fell 0.9 percent compared to one month ago, with part of the fall attributed to disruption from Hurricane Harvey.

The dollar index, which tracks the greenback against a basket of rival currencies, was mostly flat at 91.933 at 8:11 a.m. HK/SIN. The US currency firmed against the yen to trade at 111.14 — above the 110 handle seen for most of last week.

Elsewhere, the pound was slightly softer after getting a boost on Friday following Bank of England policymaker Gertjan Vlieghe's comment that data "increasingly" suggested it would be timely to raise interest rates in the "coming months." Vlieghe's comments echoed the central bank's statement on Thursday that an interest rate hike could be expected "over the coming months."

Sterling traded at USD 1.3576 by 8:10 a.m. HK/SIN after spiking nearly 1.5 percent to trade above the USD 1.36 handle on Friday.

Meanwhile, investor desire for less risky assets faded relatively quickly following North Korea's missile launch on Friday local time, but developments on the Korean Peninsula are likely to continue attracting attention.

President Donald Trump referred to North Korean leader Kim Jong Un as "Rocket Man" in a tweet on Sunday as other U.S. officials continued to reiterate that "all options" were on the table in dealing with the North. Earlier, Trump had agreed with South Korean President Moon Jae-in about putting more pressure on the North in a phone call, Reuters reported. Trump is expected to address world leaders at the United Nations on Tuesday U.S. time.

In corporate news, Ant Financial is taking its third shot at buying US payments company MoneyGram International, according to Bloomberg. Ant Financial's attempt comes after the Trump administration recently blocked a China-backed firm's bid for Lattice Semiconductor.

Over in Australia, ANZ said in a Monday statement that it would not be commenting on "media speculation" about its potential divestment of Wealth Australia. The bank added that the "process is ongoing." ANZ shares rose 0.6 percent in early trade, with other Australia-listed banks also notching gains: NAB was up 1.04 percent and Westpac advanced 0.92 percent.

On the energy front, Brent crude shed 0.11 percent to trade at USD 55.56 a barrel and US crude edged down 0.14 percent to trade at USD 49.82.

The agenda for Asia is fairly data-light today (all times in HK/SIN):

8:30 a.m.: Singapore non-oil exports9:30 a.m.: China house price index

Moneycontrol.com


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