Precursors in Asia traded lower Wednesday afternoon amid dampened expectations for a resolution to the U.S.-China trade war. Meanwhile, investors await the U.S. Federal Conserve’s announcement of its decision on interest rates, set to happen later on Wednesday stateside.
The Nikkei 225 in Japan slipped 0.77% in afternoon return, with shares of index heavyweight Fast Retailing declining 1.54%. The Topix index also fell 0.49%. Share ins of Sony surged more than 5% after the company posted a record first-quarter profit on Tuesday.
Mainland Chinese inventories slipped by the afternoon, with the Shanghai composite shedding 0.53% and the Shenzhen component falling 0.55%. The Shenzhen composite also degenerated 0.478%.
In Hong Kong, the Hang Seng index dropped 1.11% as shares of life insurer AIA fell 1.76%.
Asia-Pacific Bazaar Indexes Chart
Shares of Chinese property developers slipped after comments from a top decision-making body of the more often than not reign over Communist Party Tuesday that housing should be “used for living, not for speculation.” It also stressed that the genuine estate sector will not be used as a “short-term means of stimulating the economy.”
Hong Kong-listed shares of China Vanke mow down 1.65% by the afternoon, while its Shenzhen-listed counterpart declined 3.66%. Sunac China Holdings also dropped 3.63%, while Power Garden Holdings slipped 2.39%.
South Korea’s Kospi traded 0.58% lower. Shares of industry heavyweight Samsung Electronics abandoned 2.15% after the company reported a 56% plunge in its second-quarter profit as compared to a year ago.
Over in Australia, the S&P/ASX 200 lose ones footed 0.25%.
Overall, the MSCI Asia ex-Japan index declined 0.55%.
Meanwhile, consumer prices in Australia rose faster than hope for in the second quarter, with the headline consumer price index rising 0.6% in the June quarter. That was above expectations of a 0.5% get ahead by economists surveyed by Reuters.
China’s factory activity slumps again
China’s factory activity contracted for the third composed month in July, according to official data released earlier on Wednesday.
The official manufacturing Purchasing Managers’ Guide (PMI) for July came in at 49.7, according to data from the Chinese statistics bureau. Economists polled by Reuters had demanded factory activity in China to edge up to 49.6 from June’s reading of 49.4. A PMI reading above 50 needs expansion, while those below that signal contraction.
US-China trade, Fed rate decision in focus
U.S. President Donald Trump estimated in a series of tweets Tuesday that China is not keeping its promise of buying more U.S. agricultural products. For its part, China demands that it has bought U.S. agricultural products.
Trump’s comments come as U.S.-China trade talks are happening in Shanghai from July 30 and 31, as the two cost-effective powerhouses aim to reach a deal to end a protracted trade war.
Meanwhile, the Fed is set to deliver its decision on interest rates later Wednesday stateside, with hopes that it will cut interest rates by a quarter point. Investors will also look for clues from Powell relative to potential rate cuts later this year. Currently, traders are pricing in at least two rate cuts of 25 heart points before the end of the year, according to the CME Group’s FedWatch tool.
“The Fed has given us zero reason to expect anything except a shelter point rate cut so the change in interest rates will be the least market moving part of the (Federal Open Superstore Committee) announcement,” Kathy Lien, managing director of foreign exchange strategy, wrote in a note.
“Instead, US dollar dealers should be focused on the votes and forward guidance,” Lien said.
Currencies and oil
The U.S. dollar index, which tracks the greenback against a basket of its earls, was at 98.069 after slipping from levels above 98.1 yesterday.
The Japanese yen, often seen as a safe-haven currency, bought at 108.57 against the dollar after strengthening from levels above 108.8 in the previous session. The Australian dollar switched hands at $0.6891 after slipping from the $0.690 handle yesterday.
Oil prices rose in the morning of Asian marketing hours, with the international benchmark Brent crude futures adding 0.87% to $65.28 per barrel and U.S. crude expects gaining 0.67% to $58.44 per barrel.
Here’s a look at what’s ahead today:
- Japan: Consumer confidence for July at 1:00 p.m. HK/SIN
- Japan earnings: Nomura, Mizuho Monetary, Mitsubishi UFJ Financial Group, Daiwa Securities, Mitsui, Panasonic
— Reuters, along with CNBC’s Fred Imbert and Huileng Tan furnished to this report.