Asian stocks wavered on Thursday as investors grappled with the seemingly diminishing ability of major central banks to stimulate growth, while a tumble in crude oil inflamed already heightened risk aversion.
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A man uses a mobile phone in front of an electronic stock indicator of a securities firm in Tokyo, Wednesday, Sept. 14, 2016.
USA stocks are skidding Tuesday as investors worry about the possibility of a weaker global economy and try to anticipate the Federal Reserve’s plans for interest rates.
An easing in US rate hike expectations following a speech by one of the Federal Reserve’s policymakers helped shore up stock markets around the world on Tuesday, Sept. 13, 2016. Energy companies fell with the price of oil after a leading industry group said demand for oil is down more than it previously thought.
The Australian dollar touched a almost seven-week low against the greenback of $0.7443, while the New Zealand dollar hit a more than one-week low of $0.7235. Intersil climbed $1.81, or 9.2 percent, to $21.58.
Wall Street rallied 1 percent on Thursday, buoyed by Apple’s best four-day run since 2014, higher oil prices and ho-hum economic data that further dimmed expectations for an interest rate hike next week.
The Dow Jones industrial average gave up 243 points, or 1.3 percent, to 18,082 as of 1:15 p.m.
However, the dovish remarks from Brainard helped U.S. stocks climb about 1.5 percent, recovering almost all of the losses from Friday when surprisingly hawkish comments from other Fed officials sparked a sell-off.
Over the past two weeks before a media blackout, Federal Open Market Committee (FOMC) members have given mixed messages on growth, the global economy and the removal of accommodative policy.
Expectations of higher interest rates typically boost the dollar by making it more attractive to yield seeking investors.
ANALYST’S COMMENT: “She highlighted global challenges such as muted inflation and global uncertainties and particular concerns for the US economy”, said Bernard Aw, a market strategist at IG in Singapore. “Last night’s comments from Brainard acted as a neat counterweight to recent hawkish rhetoric”.
MSCI’s broadest index of Asia-Pacific shares outside Japan dipped 0.2 percent, reversing earlier gains, though the fall was far less than Monday’s 2.4 percent. Hong Kong’s Hang Seng was little changed at 23,218.34.
Singapore and Indonesia led equity losses as they resumed trading after a holiday, with the Straits Times Index (STI) fell as much as 2.01 per cent Tuesday, posting its biggest intra-day percentage loss since June 24, before closing the day down 1.9 per cent at 2818.38.
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ENERGY: The price of oil recovered some of its 3 percent overnight drop which followed International Energy Agency remarks about weaker oil demand due to slower global economic activity. Asian markets are down with Japan’s Nikkei down 1.39% after a report said that the BOJ was considering an interest-rate cut at next week’s policy meeting, taking rates deeper into the negative territory while Shanghai is closed on account of mid-autumn festival.
