Asia Stocks Drop on Low Volume Before Fed; Commodity Shares Fallby
Trading volumes below average in Japan, Australia, Hong Kong
U.S. central bank expected to keep interest rates on hold
Asian stocks fell in thin trading before a Federal Reserve policy decision as commodity producers and health-care shares weighed on the regional equities index.
About two shares dropped for each that rose on the MSCI Asia Pacific Index, which declined 0.8 percent to 125.97 as of 5:04 p.m. in Tokyo. China’s economy won’t have a hard landing and the government will ensure growth hits targets, Premier Li Keqiang said as the largest annual gathering of lawmakers drew to a close. The Fed is expected to keep interest rates unchanged at the conclusion of its two-day meeting.
“The Fed meeting this evening has loomed large over Asian markets today,” said Angus Nicholson, Melbourne-based market analyst at IG Ltd. “Volumes were down across the board, as investors decided to keep money on the sidelines until they see the ultimate decision from the Fed.”
Japan’s Topix index slid 0.8 percent, with volume about 30 percent below the 30-day average. Sharp Corp. sank 12 percent after people familiar with the matter said Foxconn Technology Group is delaying finalization of its deal with Sharp.
The yen retreated 0.4 percent to 113.67 per dollar, after strengthening 0.6 percent on Tuesday as the Bank of Japan kept its policy rate at minus 0.1 percent at a review. The central bank has quite a lot of room to cut the key rate further and theoretically it could go to minus 0.5 percent, Governor Haruhiko Kuroda told parliament on Wednesday.
Australia’s S&P/ASX 200 Index added 0.1 percent. BHP Billiton Ltd. dropped 1.5 percent and was the one of the biggest drags on the regional equity gauge after the Bloomberg Commodity Index fell to a one-week low on Tuesday.
South Korea’s Kospi index rose 0.3 percent. Singapore’s Straits Times Index was little changed and Taiwan’s Taiex index added 1 percent. India’s S&P BSE Sensex Index fell 0.5 percent. New Zealand’s S&P/NZX 50 Index slid 0.2 percent.
Hong Kong’s Hang Seng Index slipped 0.2 percent with volume down 26 percent, while the Hang Seng China Enterprises Index lost 0.4 percent.
The Shanghai Composite Index rose for a fourth day, led by financial and energy companies, after Premier Li said that the government will employ “innovative measures” to keep economic growth on track.
Futures on the Standard & Poor’s 500 Index added 0.1 percent after the underlying gauge slid 0.2 percent Tuesday, posting back-to-back declines for the first time this month. Valeant Pharmaceuticals International Inc. plunged 51 percent after cutting its profit forecast.
Results of U.S. presidential candidate contests in states including Florida boosted the likelihood that Hillary Clinton will be the Democratic Party’s representative in a November election and kept Donald Trump as the front-runner to secure the Republican Party’s nomination.