Asian Stocks Hold Gains Before Fed; Trump Hits Drugmaker Shares

  • Finance gauge is biggest gainer on MSCI Asia Pacific Index
  • President Trump’s tweet drags Japanese pharmaceuticals down

Rising Yields Might Signal an Imminent Fed Rate Hike

Asian stocks were little changed after two days of gains as investors awaited a near certain interest rate hike in the U.S.

The MSCI Asia Pacific Index was up by less than 0.1 percent as of 3:18 p.m. in Hong Kong after rising on Monday and on Tuesday. The gauge was down as much as 0.3 percent earlier as a tweet from U.S. President Donald Trump, who said  he’s working on a “new system where there will be competition in the drug industry,” weighed on regional pharmaceutical shares.

“Optimism has been put in check with the prospect of higher interest rates,” said Jemmy Paul, investment director at PT Sucorinvest Asset Management in Jakarta. “Trump’s tweet also reminds us of the risk that companies in other industries are facing, especially those who are exposed to U.S. markets.”

Still, the Asia-Pacific index is near its highest price-to-book ratio in two years. Investors have pushed up the value of global equities toward $71 trillion in a post-U.S. election rally amid optimism Trump can boost growth with spending projects and lower taxes. The U.S. Federal Reserve is set to meet next week.

Stocks in Japan were lower after Trump’s comments. Shanghai stocks were little changed before trade data showed February imports surged. The results were skewed because of the week-long Lunar New Year holiday.

SUMMARY

  • Japan’s Topix -0.3%, Nikkei -0.5%
    • Yen +0.3% to 113.71 per dollar
  • Hang Seng Index +0.3%, HSCEI +0.5%
  • ASX 200 little changed
    • BHP Billiton -1.1%
  • South Korea’s Kospi +0.1%
  • Singapore’s Straits Times Index +0.4%, Jakarta Stock Exchange Composite Index -0.1%, Malaysia’s KLCI Index -0.1%, Philippines PSEi Index +0.4%, Thai’s SET Index -0.7%, India’s Sensex -0.6%
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