Asian stocks slightly lower ahead of Fed meeting


Posted at Jun 24 2008 07:05 PM | Updated as of Jun 25 2008 03:05 AM

Agence France-Presse

HONG KONG - Asian stocks closed mostly down amid uncertainty ahead of a US interest rate decision later this week and continuing fears over the economic damage from soaring oil prices.

The biggest drop was 1.76 percent in Taipei, where an analyst said concerns over oil prices were likely to run deeper as, despite Saudi Arabia increasing production, the crisis drags on.

Seoul fell 0.3 percent as it continued to worry about US economic conditions and oil costs, while Hong Kong dropped 1.14 percent, Singapore shed 0.57 percent and Sydney remained level.

Tokyo was little changed as dealers awaited the outcome of the two-day US Federal Reserve meeting starting Tuesday, with most analysts expecting interest rates to be kept at 2.0 percent.

Shanghai was one of just three to buck the regional trend rising 1.54 percent, a day after shedding 2.54 percent.

However, its gains came as China's largest steelmaker tumbled after agreeing a new iron ore price deal with Rio Tinto. Wellington and Kuala Lumpur were also slightly up.

TOKYO: Share prices ended level, dealers said.

The benchmark Nikkei-225 index slipped 7.91 points or 0.06 percent to end at 13,849.56. The broader Topix index of all first-section shares edged up 1.26 points or 0.09 percent to 1,349.19.

"It seems like only short-term investors are trading," Yutaka Miura, senior technical analyst at Shinko Securities, told Dow Jones Newswires.

Market players were looking ahead to the Fed's two-day meeting slated to begin Tuesday at which US interest rates are expected to be left unchanged at 2.0 percent, dealers said.

Investors will be focusing on the Fed's post-meeting statement for any clues on prospects for higher US interest rates that could pressure Wall Street shares.

Steel shares were under pressure after Anglo-Australian mining group Rio Tinto said Monday it had agreed a near doubling of the price of its iron ore sales to Chinese steel maker Baosteel.

Automakers fared better, with Honda Motor adding 2.7 percent to 3,770 yen.

SYDNEY: Share prices finished little changed, dealers said.

The benchmark S&P/ASX 200 index rose 6.3 points or 0.12 percent to 5,290, while the broader All Ordinaries was up 9.9 points at 5,418.8.

Market turnover was 1.90 billion shares worth 6.41 billion Australian dollars (6.1 billion US).

ANZ bank was down 3.5 percent to 17.95.

Rio Tinto gained 3.0 percent to 141.75, while BHP Billiton rose 2.9 percent to 45.88.

Shares in power retailer Origin Energy rose 5.8 percent to 16.42 after British giant BG Group renewed its 15.50 dollar per share offer.

SHANGHAI: Shares closed 1.54 percent higher as a rebound by large-cap financial and property developers boosted the market, dealers said.

The benchmark Shanghai Composite Index, which covers A and B shares, closed up 42.60 points at 2,803.02 on turnover of 49.9 billion yuan (7.2 billion dollars).

"But the gains in these companies aren't sustainable as the rising ore iron price and energy price are adding pressure to inflation," said Wang Junqing, an analyst at Guosen Securities.

Baosteel, the country's largest steelmaker, tumbled 7.83 percent to 9.06 yuan after it agreed to nearly double what it pays Anglo-Australian mining group Rio Tinto for some types of iron ore.

The Shanghai A-share Index added 1.54 percent to 2,940.59. The Shenzhen A-share Index gained 2.79 percent to 838.83.

Industrial and Commercial Bank of China, the country's largest lender, rose 2.16 percent to 5.20 yuan.

Sinopec, Asia's largest refiner, fell further, down 3.76 percent to 11.25 yuan. The Shanghai B-share Index was up 2.16 percent to 207.67, while the Shenzhen B-share Index added 1.71 percent to 483.30.

TAIPEI: Shares closed 1.76 percent lower, dealers said.

The weighted index fell 138.37 points to end at the day's low of 7,738.12, on turnover 92.87 billion Taiwan dollars (3.05 billion US).

The bellwether electronics sector, led by flat panel display makers, was down 1.88 percent.

Inflation fears set in to erode earlier gains after the market had managed to rebound, dealers said.

"The thin volume makes it extremely hard for any gains to be sustained," First Taisec Securities analyst Stanley Hsu told Dow Jones Newswires.

Concord Securities analyst Allen Lin said because no satisfactory conclusion was reached by oil producing nations at a summit over the weekend, concerns over oil prices are running deeper.

The electronics sector encountered heavier pressure on worries that flat panel display makers face falling product prices, dealers said.

AU Optronics was down 5.2 percent at 47.95 dollars.

Yulon Motor was up 1.9 percent at 32.80.

SEOUL: South Korean shares closed 0.3 percent lower as investors picked up oversold consumer electronics goods makers and financial stocks, dealers said.

The KOSPI closed down 4.75 points at 1,710.84, after falling as low as 1,699.81. Volume was 357.8 million shares worth 3.83 trillion won (3.72 billion dollars.

The index dropped nearly one percent but some buyers emerged after key Asian markets either trimmed early losses or traded higher.

"The market will likely show lacklustre moves tomorrow amid lingering concerns over the rising oil prices and the uncertain US economic condition," said Lee Jae-Hoon, an analyst at Mirae Asset Securities.

Samsung Electronics was up 0.2 percent at 659,000 won. Hyundai Steel was down 0.5 percent at 77,700 won. Korea Exchange Bank fell 2.08 percent to 14,100 won.

SINGAPORE: Share prices closed 0.57 percent lower Tuesday, dealers said.

The blue chip Straits Times Index fell 16.99 points to 2,962.16 on volume of one billion shares worth 1.01 billion Singapore dollars (742 million US).

DBS Vickers said that "in the near term the market is expected to be volatile with a downside bias as it climbs the wall of concerns over rising inflation and interest rates."

The Federal Reserve is widely expected to leave its base rate unchanged at 2.0 percent after its two-day meeting Wednesday, economists said.

Local bank DBS dropped 18 cents to 18.74 Singapore dollars, while CapitaLand slipped six cents to 5.75.

Singapore Airlines surrendered two cents to 14.84 and Singapore Telecommunications was off four cents at 3.67.

KUALA LUMPUR: Share prices closed 0.4 percent higher, dealers said.

The Kuala Lumpur Composite Index rose 4.87 points to 1,200.28.

Dealers say buying interest was largely from local government-linked funds and reflected a return to some stability after Malaysia's ruling coalition Monday pushed through a vote supporting its fuel price hike in parliament.

Top lender Maybank was stable at 7.15 ringgit, Telekom rose 0.03 ringgit to 3.28 ringgit while utility giant Tenaga Nasional was steady at 8.10 ringgit.

BANGKOK: The Thai stock market closed 0.67 percent lower as investors stayed on the sidelines awaiting the result this week of a no-confidence vote against the government, dealers said.

They said the losses were led by big-cap shares in the energy sector, while concerns about volatile global oil prices persisted.

The Stock Exchange of Thailand (SET) composite index fell 5.15 points to close at 763.75 points, while the blue-chip SET 50 index lost 4.47 points to close at 544.92.

Thailand's biggest energy firm PTT lost 8.00 baht to close at 300.00 baht.

Thai Airways International edged down 0.10 to close at 20.90.

JAKARTA: Indonesian shares closed little changed Tuesday as investors looked for fresh leads, dealers said.

The Jakarta Composite Index rose 0.1 percent, to 2,365.37.

Coal miner Bumi Resources fell 0.5 percent at 8,450 rupiah, Telkom fell 0.6 percent at 7,700 rupiah and rival Indosat rose five percent at 6,300.

MANILA: Philippine share prices closed 1.0 percent lower, dealers said.

The composite index lost 24.51 points to 2,474.87. The all-shares index shed 13.85 points to 1,580.91.

Philippine Long Distance Telephone fell 50 pesos to 2,375, while Metropolitan Bank lost two pesos to 33.

WELLINGTON: New Zealand share prices ended 0.32 percent higher, dealers said.

The NZX-50 gross index rose 10.63 points to 3,298.18.

Market leader Telecom fell seven cents to 3.70 dollars and Fletcher Building reversed early gains to close down 16 cents at 6.42.

Contact Energy jumped 16 cents to 8.39 dollars following news of a renewed bid for Australian majority owner Origin Energy from British gas producer BG Group.

Casino operator Sky City gained eight cents to 3.33 dollars and Air New Zealand gained three cents to 1.13 dollars.

MUMBAI: Indian shares fell 1.31 percent on Tuesday as overseas funds sold amid fears of further monetary tightening by India's central bank, dealers said.

The benchmark Mumbai 30-share Sensex index fell 186.74 points to 14,106.58, the fifth straight day of losses.

Earlier in the day, the Sensex hit a new intra-day low this year at 13,991.31, from its previous low for the year of 14,163.45 on Monday.