Investors are looking forward to this week's meeting of the U.S. Federal Reserve's Open Market Committee (FOMC). The meeting begins on Tuesday and ends at Wednesday. Fed Chairman Ben Bernanke will also hold a press conference later on Wednesday. A majority of the market place believes the U.S. central bank at this week's meeting will announce it will begin to scale back, or taper its monthly bond-buying program.
Some reckon the Fed will announce a $10 billion or $15 billion reduction in its $85 billion-a-month bond-buying program. The surprise to the markets could be if the Fed either does nothing at this meeting, or is more aggressive in its initial reduction in bond purchases.
On top of the size of tapering, what's more important this time is the Fed's forecast of interest rates in 2016, which will give markets an idea on the pace of future rate hikes.
World stock markets rose Monday after surprise weekend news that former U.S. Treasury secretary Larry Summers withdrew his name for consideration for chairman of the U.S. Federal Reserve, due to the likely acrimony his nomination would have brought. Many reckoned Summers was President Obama's first choice for the Fed chief. Many markets were cheered on the news on ideas Summers would have been a bit more hawkish on U.S. monetary policy than would current Fed vice chair Janet Yellen, who is now widely believed to be next in line to lead the Federal Reserve.
Among Asian bourses, the Japan share market closed lower after coming back online after a Monday public holiday, as investors consolidated positions on cautious ahead of the U.S. Federal Reserve's two-day policy meeting starting later in the day and as a firmer yen weighed on major Japanese exporters like Fanuc and Denso. The benchmark Nikkei 225 index closed 93 points lower at 14311.70, while the broader Topix index of all first-section shares was 3.64 points lower at 1181.64.
Shares of mobile phone carriers dropped as concerns persisted over accelerating competition among the major players offering Apple Inc.'s new line of iPhones. Shares of NTT DoCoMo Inc sank 2.7% to 156900 yen, while rivals Softbank Corp dropped 3.8% to 6360 yen and KDDI Corp lost 7.2% to 4800 yen.
Shares of pharmaceutical company Daiichi Sankyo declined 6.8% to 1772 yen after the U.S. Food and Drug Administration is blocking imports of medicine made at the newest plant of India's Ranbaxy Laboratories, a Daiichi Sankyo subsidiary.
In Australia, the Australian share market closed mixed, as investors chose to book some gains on overheating worries after the market hovering near five year high and on caution ahead of a Fed meeting that will decide over the US central bank's stimulus. The benchmark S&P/ASX200 was up 3.20 points, or 0.06%, to 5251.20, while the broader All Ordinaries jumped 3.50 points, or 0.07%, to 5245.20.
Shares of precious-metal miners were the biggest decliners on the ASX, on the back of pullback in bullion prices. Perseus Mining fell 5% to A$0.575, Kingsgate Consolidated declined 4.8% to A$1.705 and Newcrest Mining lost 2.3% to A$12.34. Materials and resources blue chips were also weaker, with BHP Billiton was down 0.4% to A$36.14, Rio Tinto dropped 1% to A$62.76 while Fortescue Metals Group added 0.9% to A$4.62.
Virgin Australia Holdings gained 1.11% to A$0.46 after the company said Abu Dhabi-based Etihad Airways increased its stake in the carrier to 14.4%.
Shares of TPG Telecom rose 14.3% to A$4.32 after the company announced a plan to rollout fibre-optic cables to half a million apartments in Australia to take advantage of the change in broadband policy under the new Coalition government.
TPG Telecom said it will extend its existing fibre networks to basements of apartments in major capital cities, promising to deliver NBN-like internet speed of 100 megabits per second. The Coalition's broadband policy encourages internet services providers such as TPG to invest in infrastructure to speed up the delivery of broadband to households. TPG's foray into fibre network came as it reported a net profit of A$149.2 million for the financial year ended July 31, up 64% from the previous year.
In New Zealand, NZ shares were also mixed today, keeping the NZX 50 Index at a record high, as Telecom and Tower rose, while regulatory uncertainty weighed on Chorus. The NZX 50 rose 4.404 points, or 0.1%, to 4698.027. Within the index, 26 stocks rose, 15 fell and nine were unchanged.
In China, the China's shares finished lower for third straight session, dragging the benchmark Shanghai Composite index lower by 2.05% to finish at 2185.56.
The profit taking in the Chinese market triggered by weaker than expected foreign investment data and concerns over market liquidity as money-market rates rose before the start of holidays this week.
A report showed foreign-direct investment grew 0.6% last month, down from market expectation of around 12%. A gauge of funding availability in the banking system climbed as demand for cash increased ahead of local holidays. Chinese markets will close on Sept. 19 and 20 for the mid-Autumn festival and Oct. 1 to 7 for National Day holidays.
In Hong Kong, HK shares eased as investors booked gains after a strong advance in the previous session and on cautious ahead of the U.S. Federal Reserve's two-day policy meeting at which it is expected to begin withdrawing stimulus.
Among the 50 HK blue chips, 24 stocks fell and 19 stocks finished higher, while remaining 7 shares closed steady. China Coal Energy Co lost 2.7% to HK$5.04, becoming the biggest blue-chip loser. The Bank of East Asia ended up 5.7% to HK$33.55, being the largest blue-chip gainer, on M&A fervour.
Casino stocks declined in Hong Kong as Kim Eng Securities reported Macau's September gaming revenue was trending 20% to 24% higher. Galaxy Entertainment Corp declined 2.2% to A$54.15, Sands China fell 0.2% to HK$47.65, Wynn Macau shed 0.2% to HK$25.15 and MGM China Holdings lost 0.4% to HK$23.80.
Hong Kong banks went higher, led by Wing Hang Bank, surging 39.4% to HK$116.80 after announcing that its substantial shareholders had been approached for a possible stake sale in the lender. The news had a knock-on effect on other city financial companies, most notably Dah Sing Banking Group that surged 17.7% to HK$13.32.
Shares of Tencent Holdings lost 0.61% to HK$418.80 after announcing it was buying a little more than 36% of Sohu.com Inc.'s Sogou search-engine unit.
Data from the Census and Statistics Department showed that the volume of Hong Kong's re-exports of goods increased 9.2% in July from a year earlier, whereas that of domestic exports dropped 7.9%. Taken together, the volume of total exports and imports of goods rose 8.8% and 8.5%.
A separate data from the Census and Statistics Department showed that Hong Kong's seasonally adjusted unemployment rate stood at 3.3% in June - August 2013, same as that in May - July 2013. The underemployment rate also remained unchanged at 1.5% in the two periods.
In India, Indian benchmark indices alternately swung between positive and negative zone near the flat line around late afternoon as investors refrained from building large positions ahead of the outcome of the two-day meeting of the Federal Open Market Committee which begins today, 17 September 2013, and also ahead of the mid-quarter monetary policy review by the Reserve Bank of India (RBI) later this week. At 14:20 IST, the S&P BSE Sensex was up 9.07 points or 0.05% to 19,751.54.
Shares of Indian gold financing firms declined after the Reserve Bank of India (RBI) tightened rules for finance companies which lend against gold. IT stocks extended intraday gains on weak rupee.
Elsewhere in Asia, Indonesia's JKSE Composite fell 0.15%, South Korea's KOSPI fell 0.39% and Taiwan's Taiex lost 0.07%. Singapore's Straits Times Index added 0.04% and Malaysia's KLSE Composite jumped 0.23%.
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