Asia stocks lower after Wall St record ahead of Fed meeting
BEIJING (AP) — Asian stock markets fell Tuesday after Wall Street rose to a new record as investors looked ahead to this week’s Federal Reserve meeting for assurance interest rates will be kept ultra-low.
Shanghai, Tokyo, Hong Kong and South Korea declined.
Overnight, Wall Street’s benchmark S&P 500 index rose 0.2% as gains for tech, bank and consumer stocks outweighed declines for health care.
Investors expect the Fed to keep its key lending rate close to zero and to inject more money into the financial system through bond purchases following a two-day meeting that starts Tuesday.
Investors also looked for earnings announcements by U.S. companies that are expected to show stronger profits as coronavirus vaccines are rolled out and consumer spending strengthens. Quarterly profits among companies in the S&P 500 are expected to be up 24% from this time a year ago, according to a survey by FactSet.
The Fed’s announcement Wednesday of its decision “should be boring, as policymakers are widely expected to keep policy steady,” said Edward Moya of Oanda in a report.
Investor confidence has increased as governments roll out coronavirus vaccines they hope will allow business activity to return to normal. That has been tempered by unease about possible higher inflation and interest rates.
The Shanghai Composite Index sank 0.4% to 3,426.39 and the Nikkei 225 in Tokyo lost 0.3% to 29,047.00. The Hang Seng in Hong Kong retreated 0.2% to 28,910.94.
The Kospi in Seoul declined 0.2% after the government reported economic output rebounded to above pre-pandemic levels after growth accelerated to 1.6% over the previous quarter in the three months ending in March.
The S&P-ASX 200 in Australia fell 0.4% to 7,014.00. New Zealand declined while Singapore and Jakarta advanced.
On Wall Street, the S&P 500 advanced to 4,187.62. Nasdaq gained 0.9% to 14,138.78. The Dow slipped 0.2% to 33,981.57.
About a quarter of S&P 500 companies have reported quarterly results so far this earnings season. Of these, 84% have delivered earnings that topped Wall Street’s estimates, according to FactSet.
Also Wednesday, markets will focus on President Joe Biden’s prime-time address to Congress for possible details of infrastructure spending and tax reform.
In energy markets, benchmark U.S. crude rose 18 cents to $62.09 per barrel in electronic trading on the New York Mercantile Exchange. The contract fell 23 cents to $61.91 on Monday. Brent crude, used to price international oils, added 24 cents to $65.27 per barrel in London.
The dollar rose to 108.29 yen from Monday’s 108.12. The euro declined to $1.2069 from $1.2092.