The US Federal Reserve policy makers begin their two-day policy meeting tomorrow, 20 September 2016. Investors do not expect the Federal Reserve to raise interest rates when its policymakers end the two-day meeting on Wednesday. But they will scrutinize its statement for implications about the future rate hike.
A Fed rate increase appeared to at least have a 50% chance after blockbuster job gains in June and July stoked speculation that faster inflation can't be too far behind. But payroll additions were disappointing in August and growth in service-sector activity for the month fell to the lowest level since 2010. Inflation, meanwhile, generally remains tame. And while the speeches of Fed Chair Janet Yellen and other policymakers have been somewhat ambiguous, the most recent comments of Fed officials have emphasized caution in light of the risk of derailing a still-fragile recovery. What's more, the Fed has shied away from hiking rates when investors don't expect it for fear of generating market turbulence that could further rock the economy. The Fed left the target range for its federal funds rate unchanged at 0.25% to 0.5% for the fifth time during its July 2016 meeting.
Market participants are also awaiting for the outcome of the Bank of Japan policy meeting. A comprehensive review of monetary policy is expected in the meeting. But it's believed that BoJ policy makers are split over the next easing steps. Some might even believe in continuing with the current government bond purchase program and negative rates and give time for the policies to pass through to the economy. Meanwhile, the financial industry in Japan sang a chorus opposing deepening negative interest rates. Opinions are divided on what BoJ would do in the end and the result could surprise the markets.
Among Asian bourses
Australia Market ends early on technical glitches
Australian share market closed before scheduled session, as technical problems which delayed the market open have continued to plague the ASX. The ASX delayed the normal 10 a.m. local time equity market opening until 11:30 a.m. due to an issue relating to a component that allows it to manage individual stocks, Matthew Gibbs, a spokesman for the ASX in Sydney said earlier, adding that the company was working with its technology vendor Nasdaq Inc. to prevent a recurrence. It then halted trading in the afternoon before canceling it for the rest of the day. Among ASX sectors, technology, consumer goods, retailers, and energy stocks declined while materials & resources stocks ended firmer. At close of trade, the benchmark S&P/ASX 200 index fell 1.90 points, or 0.04%, to 5,294.80, while the broader All Ordinaries index has lost 3 points, or 0.06%, to 5,393.70. Falling stocks outnumbered advancing ones on the Australia Stock Exchange by 480 to 427 and 333 ended unchanged. The S&P/ASX 200 VIX, which measures the implied volatility of S&P/ASX 200 options, was down 21.09% to 11.863.
China Stocks gain on improving business confidence
Mainland China stock market closed higher, as investors chased for bargain hunting after a long mid-Autumn Festival holiday on Thursday and Friday. Meanwhile, buying appetite improved after the People's Bank of China published surveys on Sunday showing business confidence among entrepreneurs in China had picked up for the second quarter in a row in 2016. The CSI300 index of the largest listed companies in Shanghai and Shenzhen added 0.75%, to 3,263.12 points, while the Shanghai Composite Index grew 0.77% to 3,026.05 points. Nuclear power-related stocks were in the spotlight, after Britain gave the go-ahead for a $24 billion Chinese-backed nuclear power plant. Mainland-listed China Nuclear Engineering and SUFA Technology Industry Co both shot up 10%, the maximum allowed.
Hong Kong Market closed stronger
The Hong Kong stock market ended higher, as investors returning from the long Mid-Autumn Festival holiday drew optimism from surveys showing improving China business confidence and on the back of money inflows from the mainland. The benchmark Hang Seng Index declined 25.12 points, or 0.11%, to 23190.64 points. The Hang Seng China Enterprises Index, a benchmark measure of performance of mainland China enterprises, slipped 28.54 points, or 0.3%, to 9542.52. Turnover increased to HK$72.5 billion from HK$65.3 billion on Thursday. The local equity market closed on Friday for a public holiday.
Standard Chartered (02888) softened 0.9% to HK$63.05 on talks that it seeks to sell its private equity business, which is valued at US$5 billion. HSBC (00005) spent GBP35.3 million on Thursday and Friday buying back its own shares in London market. It ended up 0.4% to HK$58.65.
Credit Suisse said in a recent report that the CIRC's guiding document is positive for the healthy development of the industry. It reiterated its "overweight" stance on the sector, with target prices of HK$49 and HK$17.22 for Ping An (02318) and PICC P&C (02328). The stocks closed up 2% and 0.6% respectively.
China's NBS announced that property prices continued its surge in August. CR Land (01109) rose 3.9% to HK$22.55. COLI (00688) climbed 2.7% to HK$26.25. Sunac China (01918) acquired 42 projects from Legend Holdings (03396) for HK$16 billion. Sunac soared 7% to HK$5.87. Legend shot up 2% to HK$20.
Henderson Land (00012) added 2% to HK$46.25 after the developer disposed of Golden Centre office building in Sheung Wan for HK$4.37 billion.
Indian Market gains for 4th straight session
Indian benchmark indices settled with small gains in a lacklustre trading session. The barometer index, the S&P BSE Sensex, rose 35.47 points or 0.12% to settle at 28,634.50. The Nifty rose 28.55 points or 0.33% to settle at 8,808.40.
Asian Paints rose 1.04% to Rs 1,168. The company announced after market hours today, 19 September 2016, that as a part of the company's plan to consolidate its investments in the overseas subsidiaries, Asian Paints (International) (APIL), Mauritius, a wholly owned subsidiary of the company, has transferred its entire holding of 99.18% held in the subsidiary company, Asian Paints (Lanka), Sri Lanka, to Berger International, Singapore, a wholly owned subsidiary of APIL. The transfer process has been completed on 19 September 2016.
Power Grid Corporation of India rose 0.97% to Rs 177.25 after the company said that the company's board of directors at a meeting held on 16 September 2016 accorded investment approval for "System Strengthening in Southern Region - XXI" at an estimated cost of Rs 562.25 crore, with commissioning schedule of 30 months progressively from the date of investment approval. The announcement was made after market hours on Friday, 16 September 2016.
Elsewhere in the Asia Pacific region: New Zealand's NZX50 rose 0.4% to 7278.12 South Korea's KOSPI index grew 0.8% to 2015.75. Taiwan's Taiex index added 2.8% to 9152.88. Singapore's Straits Times index added 0.9% to 2852.14. Indonesia's Jakarta Composite index rose 1% to 5321.84. Malaysia's KLCI eased 0.1% to 1651.71.
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