Asian stocks fell broadly on Tuesday, as weak cues from Wall Street and caution ahead of central bank meetings in the U.S. and Japan overshadowed another rally in iron ore prices and some positive news out of Greece. The debt-laden country reshuffled its team for bailout negotiations with creditors on Monday, spurring hopes that negotiations over a new aid package will gain traction. The U.S. Federal Reserve kicks off a two-day policy meeting later today, with investors looking for more clarity on exactly when interest rates will rise.
Chinese shares fell from seven-year highs even as banks gained ground on the buzz that China’s central bank is considering buying assets from commercial banks. Meanwhile, China’s securities regulator has once again advised investors against investing blindly without considering the risks involved. The benchmark Shanghai Composite index fell 51.18 points or 1.13 percent to 4,476.21, while Hong Kong’s Hang Seng index closed largely unchanged with a positive bias.
Japanese shares rose on hopes of better shareholder returns after Fanuc lifted its dividend payout ratio and laid down terms for share buybacks as part of efforts to return more cash to shareholders. Shares of the industrial robot maker climbed 3.3 percent, while the benchmark Nikkei average rose 75.63 points or 0.38 percent to 20,058.95. The broader Topix index gained half a percent to close at 1,627.43 ahead of a public holiday on Wednesday and the Bank of Japan policy meeting due on Thursday.
Honda Motor closed 0.3 percent higher before releasing its quarterly earnings after the market close. The carmaker’s profit for the fiscal fourth quarter dropped 43 percent as costs related to air bag recalls offset the benefits from a weak yen. Mitsubishi UFJ Financial Group added half a percent on a Nikkei report that it would likely record a net profit of 1 trillion yen in fiscal 2014.
Mitsubishi Electric Corp gained 0.6 percent. The company said that its fiscal 2015 attributable profit climbed 53 percent from last year to 234.6 billion yen. Shares of Tokyo Electron slumped nearly 15 percent after the company called off its merger deal with Applied Materials, citing regulatory concerns.
On the economic front, Japanese retail sales plunged 9.7 percent year-over-year in March, government data showed, missing forecasts for a decline of 7.5 percent after falling 1.7 percent in February. Fitch Ratings has downgraded Japan’s sovereign rating by one notch from ‘A plus’ to ‘A’, citing uncertainty over the degree of political commitment to reduce the country’s debt and deficit.
Australian shares fell as investors cashed in on recent gains. The benchmark S&P/ASX 200 index dropped 34.2 points or 0.6 percent to 5,948.5 after closing at a seven-year high on Monday. Mining stocks closed on a subdued note after sharp gains the day before. Rio Tinto dropped 1.3 percent, smaller rival Fortescue Metals Group plummeted 5.3 percent and BC Iron tumbled 5.7 percent. BHP Billiton, which is contesting a tax bill of A$522 million on its Singaporean marketing hub operations, fell half a percent.
Gold miner Newcrest Mining rallied 3.6 percent and Evolution Mining soared 5.1 percent after gold prices hit their highest level in about two weeks on Monday. Oil & gas producer Woodside Petroleum shed 0.9 percent, Oil Search lost 2.1 percent and Santos slid 0.6 percent. Oil prices fell more than 1 percent in Asian deals after Saudi Arabia said it was ready to supply China with additional oil if needed.
Beach Energy declined 2.9 percent on reporting a 33 percent slump in quarterly revenue. In the banking sector, Westpac lost 1.2 percent, while Commonwealth, NAB and ANZ fell between 0.2 percent and half a percent. In economic news, a leading economic index for Australia gained for the third straight month in February, the latest survey from the Conference Board showed. The Australian dollar rose from its day’s lows after Reserve Bank of Australia Governor Glenn Stevens refrained from making comments about May’s monetary policy.
South Korea’s Kospi average shed 9.87 points or 0.46 percent to close at 2,147.67 on the back of foreign fund selling. Offshore investors sold shares worth a net 2.55 billion won, snapping a 15-day winning streak, preliminary data showed. Market heavyweight Samsung Electronics and automaker Hyundai Motor both fell about 2 percent, while steelmaker POSCO advanced 2.2 percent.
New Zealand shares rose despite losses elsewhere across the Asia-Pacific region. However, gains were capped before the Reserve Bank of New Zealand announces its monetary policy decision on Thursday. The benchmark NZX-50 index rose 4.30 points or 0.07 percent to 5,769.65, with 23 of its components retreating. Dividend-paying stocks led the gainers, with DNZ Property Fund climbing 2 percent and Mighty River Power gaining half a percent, while Xero fell 1 percent to a two-month low.
Elsewhere, Indonesia’s Jakarta Composite index was losing 1 percent while the benchmark indexes in India, Malaysia, Singapore and Taiwan were down between 0.2 percent and 0.6 percent. Thailand’s exports declined at a faster-than-expected pace in March, while imports fell unexpectedly, figures from the Commerce Ministry showed.
U.S. stocks fell overnight as investors braced for a busy week of corporate earnings and the two-day Federal Reserve meeting beginning Tuesday. Biotech stocks led the losses in the wake of disappointing news from several companies including Amgen. The Dow slid 0.2 percent, the tech-heavy Nasdaq dropped 0.6 percent and the S&P 500 eased 0.4 percent.
Source: RTT News
