Asian stocks slipped on Tuesday with investor anxiety high over China’s ailing property sector which continues to lurch from crisis to crisis.
The country’s real estate woes are casting a huge shadow over the world’s No2 economy, with traders also jittery about a series of key central bank meetings this week.
Investors are all but certain the US Fed will leave rates steady again at the conclusion of a two-day meeting that begins later Tuesday, but are split on the chances on another quarter-point increase by year-end.
Fed officials will also release their latest predictions on the economy and where rates are likely to be over the coming quarters.
Japan’s Nikkei share average closed lower, with chip-related stocks leading the decline, amid caution ahead of those central bank meetings in the United states and Japan.
The Nikkei fell 0.87% to 33,242.59, with chip-making equipment maker Tokyo Electron shedding 5.23% to become the biggest drag and the worst performer on the index. The broader Topix was just ahead 0.08%, or 1.92 points, to 2,430.30.
Technology start-up investor SoftBank Group slipped 3.29% after the shares of its chip designer Arm Holdings fell on the second day of trading.
Mainland China stocks slipped, as some investors still remain cautious about the world’s second-largest economy, even as latest data showed some signs of stabilisation.
“August activity data released last week showed some marginal improvement. However, we see very limited signs that the economy has truly bottomed out,” said Ting Lu, chief China economist at Nomura. “All eyes are on the property sector after so many easing measures were rolled out in the past month.”
The Shanghai Composite Index lost 0.03%, or 0.98 points, to 3,124.96, while the Shenzhen Composite Index on China’s second exchange dropped 0.88%, or 16.83 points, to 1,904.65.
Hong Kong’s Hang Seng Index scratched out some gains after creditors of property developer Sunac China Holdings approved its $9 billion offshore debt restructuring plan.
The benchmark gained 0.37%, or 66.62 points, to close at 17,997.17, while the Hang Seng China Enterprises Index was ahead 0.42%.
US Treasury Yields at 16-Year Highs
Elsewhere across the region, in earlier trade, Mumbai, Bangkok, Seoul, Sydney, Singapore, Manila and Wellington were all down. MSCI’s broadest index of Asia-Pacific shares slipped 0.3%.
Benchmark US Treasury yields hovered near 16-year peaks and the dollar held close to six-month highs as traders braced for a Federal Reserve rate decision on Wednesday, in a week that also sees policy decisions from the Bank of Japan and Bank of England, among others.
Crude oil continued its rally amid tightening supply, stoking worries about stagflation.
Currency markets were subdued, with the US dollar index, which measures the currency against six major peers, rising 0.09% to 105.17, edging back toward last week’s six-month peak of 105.43.
The dollar added 0.1% to 147.75 yen, bringing it closer to last week’s 10-month top of 147.95.
Ten-year yields were little changed at just above 4.31%, holding close to the 4.366% level reached on August 22, which was the highest since 2007.
Tokyo – Nikkei 225 < DOWN 0.87% at 33,242.59 (close)
Hong Kong – Hang Seng Index > UP 0.37% at 17,997.17 (close)
Shanghai – Composite < DOWN 0.03% at 3,124.96 (close)
London – FTSE 100 > UP 0.21% at 7,669.34 (0937 BST)
New York – Dow > UP 0.02% at 34,624.30 (Monday close)
- Reuters with additional editing by Sean O’Meara