Asian Stock Markets Mixed as Investors Wait for Yellen Testimony

  • Gains in Singapore, Philippines offset declines in China
  • Japan’s Topix Index flirts with bull market after yen drops

Asian stocks markets were mixed with gains in Singapore, India and the Philippines offsetting weakness in China, Japan and South Korea as investors waited for a speech by Federal Reserve Chair Janet Yellen.

About five stocks rose for every four that fell on the dollar-denominated MSCI Asia Pacific Index, which added 0.1 percent as of 12:47 p.m. in Tokyo. The gauge is down more than 2 percent since Donald Trump’s shock U.S. election win last week as investors sold emerging-market assets on bets American borrowing costs will rise faster than previously forecast. Japan’s Topix index was flat Wednesday after climbing since the U.S. election and is up around 19 percent from a February low, near a bull market.

Cleveland Fed President Loretta Mester said the monetary authority shouldn’t overreact to market moves following the election because it’s too soon to predict any new spending and trade policies, Reuters reported Wednesday. Futures are pricing in almost certain odds the Fed will raise rates next month, which means investors will seek guidance from Janet Yellen’s testimony to Congress Thursday in Washington on how Trump’s election affects her growth and inflation forecasts.

“We are seeing the usual cautiousness appear as many investors awaited Fed Chair Janet Yellen’s Congressional testimony,” said Tony Farnham, a Sydney-based strategist at Patersons Securities Ltd. “The economic data released on the day were, as a group, on the soft side” in the U.S., he said.

Japan’s Topix index slipped 0.2 percent as the yen gained 0.1 percent to 109.02 a dollar. Shares in Tokyo closed Wednesday at the highest level since early February as a weaker Japanese currency, which is down 3.9 percent this month, buoyed exporters, and banks surged amid a global rebound in borrowing costs.

South Korea’s Kospi index and Hong Kong’s Hang Seng both fell 0.1 percent, while the Shanghai Composite Index dropped 0.3 percent. The Hang Seng China Enterprises index of mainland companies listed in Hong Kong declined 0.1 percent. Australia’s S&P/ASX 200 Index was little changed, while New Zealand’s benchmark measure fell 0.4 percent.

Singapore’s Straits Times Index advanced 0.5 percent, India’s S&P BSE Sensex Index climbed 0.5 percent and Taiwan’s Taiex index rose 0.1 percent.

Philippine Growth

The Philippine Stock Exchange Index increased 0.8 percent after being up as much as 2.2 percent earlier after economic growth beat estimates. The country’s economy expanded 7.1 percent in the third quarter from a year earlier, more than the 6.7 percent median estimate in a Bloomberg survey.

“It’s a surprise and huge relief for the market,” said John Padilla, head of equities at Metropolitan Bank & Trust Co. in Manila, adding that investing in infrastructure stocks was a smart bet.

E-mini futures on the S&P 500 Index added 0.1 percent. A drop in financial shares helped push the S&P 500 down 0.2 percent Wednesday, as expected volatility in the index ticked higher. The CBOE SPX Volatility Index rose 2.6 percent last session, after falling 7.7 percent on Tuesday.

Reports Wednesday indicated U.S. inflation remains muted as wholesale prices were unexpectedly weak in October. A separate measure showed output at manufacturers rose for a second month, a sign the industry is gradually recovering from a prolonged period of weakness.

— With assistance by Ian C Sayson

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