Investment rationale for cyclical assets remain muted today as investors closely awaiting for a Fed decision on the QE program, which possibly highlight about timing when the program's winding down might begin.
Market pundits are widely expecting that the US Federal Reserve would halt tapering monetary stimulus until at least the first quarter of next year. Weak US pending home sales data for September coupled with weaker than expected US hiring and durable goods orders for September, and the 16-day government shutdown that took at least $24 billion out of the economy reinforcing expectations that the central bank will keep its bond-buying program unchanged.
Markets had previously expected the withdrawal of stimulus to begin this year but expectations have shifted to next year as the pace of improvement in the U.S. economy waned. The wording of the Fed's statement this week will be scrutinized for any new indications about when that process will begin. Any hints of change could roil markets.
Among Asian key bourses, Japanese financial market finished lower, as investors took profit after a strong rally the previous day and amid caution ahead of Wednesday's Federal Reserve policy decision. The Nikkei Stock Average fell 0.5% to 14,325.98. The broader Topix lost 0.41% to 1193.50.
Japanese exporters were weak, with Japanese suppliers to Apple led losses after the U.S. technology giant reported that it sold fewer than expected iPhones in the quarter ended September. Taiyo Yuden fell 2.05% to 1241 yen and Murata Manufacturing sank 1.7% to 7770 yen.
KDDI Corp advanced 2.4% to 5230 yen after the telecommunications company reported a record-high and consensus-beating operating profit for the first half of the fiscal year, due to a stronger-than-expected increase in subscription and a rise in usage revenue.
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Japan's unemployment rate fell to 4% in September from 4.1% in the previous month, the government said Tuesday, indicating companies have become willing to hire more workers with the economy recovering.
In Australia, shares in Sydney market dropped as investors withdrew some gains off the table after the benchmark indices hit another five-year high prior day. The benchmark S&P/ASX 200 index lost 0.48% to 5415.50.
Australian banking and financial stocks finished mixed, with Australia & New Zealand Banking Group rising 1.2% to A$33.63 on the top of 1.8% prior day after reporting a forecast-beating fiscal 2013 cash profit, as well as a dividend that was higher than expected. Meanwhile, Westpac Banking Corp closed 0.03% down at A$34.60 and Commonwealth Bank sank 0.8% to A$76.79. National Australia Bank closed steady at A$36.68
Australian materials and resources shares declined, with Fortescue Metals Group loosing 1.9% to A$5.32, while BHP Billiton lost 0.7% to A$37.59 and Rio Tinto dropped 0.7% to A$37.59. Gold miner Newcrest Mining sank 0.9% to A$10.90 and Perseus Mining fell 16.5% to A$0.53.
In China, Chinese financial market extended a period of losses that started last week weaker, with technology, media and telecom firms leading the fall. The Shanghai Composite Index declined 0.23% at 2128.86, while Shenzhen Composite Index dropped 0.2% to 1037.85.
Media and tech related shares were biggest drag on the Chinese market. Tsinghua Tongfang dropped to 8.38 yuan. Jiangsu Phoenix Publishing & Media Co slumped 7.1% to 9.96 yuan. Zhejiang Beingmate slumped 7% to 33.75 yuan after third-quarter net income plunged 59% from a year ago.
Chinese financial shares advanced against the falling index thanks to expectations that the regulator may soon launch a pilot program to allow the issue of preferred shares as a step toward building a multi-layer capital market. Ping An Bank climbed 7.5% to 14.12 yuan. Industrial Bank Co. advanced 4.8% to 12.09 yuan.
In Hong Kong, HK shares finished higher in volatile trade, with the benchmark Hang Seng index rising 0.18% to 22846.54, aided by a bump higher in financial shares.
Among the 50 HK blue chips, 36 stocks rose and 13 fell, with one stock remaining steady. Tencent dipped 3.4% to HK$418.4 on JP Morgan's disposal, making itself the top blue-chip loser.
Shares of Hong Kong listed Chinese financials rallied today, with the gains coinciding with the China's central bank adding liquidity to the market after holding back on such a move in recent days despite a climb in money-market rates. The People's Bank of China offered some 13 billion yuan ($2.1 billion) in reverse repurchase agreements on Tuesday, adding cash to the market after refraining from doing so last week. Among lenders, China Merchants Bank Co added 1.8% to HK$14.72 ahead of the company's financial results due later today. Stock in China Construction Bank Corp rose 2.1% to HK$5.89, on the top of Monday's 1.1% gain despite the lender reported slower-than-expected quarterly profit growth.
Macau gaming players weakened on Morgan Stanley's bearish comments. Both Galaxy and Sands China slipped 3.2% to HK$56.2 and HK$53.85.
In India, Indian benchmark indices surged as the Reserve Bank of India (RBI) after a monetary policy review raised its main lending rate viz. the repo rate by 25 basis points as expected and decided to infuse liquidity into the banking system. The S&P BSE Sensex was provisionally up 346.40 points or 1.68%, up about 420 points from the day's low and off close to 40 points from the day's high.
Among Indian blue chips, banking stocks were in demand after the Reserve Bank of India (RBI) after a monetary policy review rose its main lending rate viz. the repo rate by 25 basis points asa expected and decided to infuse liquidity into the banking system. Metal and mining stocks edged higher. Car major Maruti Suzuki India jumped on strong Q2 result.
Elsewhere in the region, New Zealand's NZX 50 index dropped 0.22%. Indonesia's Jakarta Composite index fell 0.6%. South Korea's KOSPI rose 0.16%. Taiwan's Taiex index added 0.16%. Malaysia's KLSE Composite lost 0.15%. Singapore's Straits Times index rose 0.03%.
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