Asian Equities Close Mixed as US Federal Reserve Slashes Rates

By Investors Hub

Asian stocks turned in a mixed performance on Thursday after the U.S. Federal Reserve cut interest rates, as widely expected but indicated it is ready to hold off on further rate cuts for now.

Investors also digested news that Chile has canceled the Asia-Pacific Economic Cooperation summit scheduled to be held in Santiago in mid-November, citing violent protests across the country.

U.S. President Donald Trump and Chinese President Xi Jinping were due to meet at the summit to discuss and possibly sign phase one of a U.S.-China trade deal.

Chinese shares fell after the release of weak economic data. The benchmark Shanghai Composite Index dropped 10.26 points, or 0.4 percent, to 2,929.06, while Hong Kong’s Hang Seng Index gained 239.01 points, or 0.9 percent, to end at 26,906.72.

Chinese factory activity slipped to an eight month-low in October, official data showed. The manufacturing PMI fell to 49.3 from 49.8 a month ago. China’s service sector also logged weaker growth in October, with the corresponding index dipping to 52.8 from 53.7 in September.

Japanese shares eked out modest gains after the Bank of Japan maintained its policy rates but signaled further monetary easing going forward. The central bank said short and long-term interest rates are expected to remain at current or lower levels as long as it is necessary to achieve its price stability target.

A rebound in industrial output also helped underpin investor sentiment. Industrial production in Japan was up a seasonally adjusted 1.4 percent month-on-month in September, the government said in a preliminary report. That beat forecasts for an increase of 0.4 percent following the 1.2 percent decline in August.

On a yearly basis, industrial output was up 1.1 percent – again beating expectations for a decline of 0.1 percent following the 4.7 percent drop in the previous month.

The Nikkei 225 Index rose 83.92 points, or 0.4 percent, to 22,927.04, while the broader Topix closed marginally higher at 1,667.01.

Sony soared 4.1 percent after posting the highest operating profit for a second quarter on the back of strong demand for image sensors for mobile phones. Market heavyweight SoftBank Group advanced 3.7 percent and Fast Retailing added 1.3 percent.

Apple Inc. supplier Alps Alpine jumped 8.7 percent after Apple forecast sales for the crucial holiday shopping quarter ahead of Wall Street expectations.

Australian markets fell modestly, with lower oil prices and weak results from Australia and New Zealand Banking Group weighing on sentiment.

The benchmark S&P/ASX 200 Index dropped 26.10 points, or 0.4 percent, to 6,663.40, while the broader All Ordinaries Index ended down 21.80 points, or 0.3 percent, at 6,772.90.

ANZ tumbled 3.3 percent as the country’s fourth-largest lender missed market expectations for second-half profits. Commonwealth Bank of Australia, Westpac Banking Corp and National Australia Bank all fell more than 1 percent.

A drop in oil prices also pulled down energy stocks, with Beach Energy shares falling as much as 2.6 percent.

Meanwhile, gold miners Evolution Mining and Newcrest edged up slightly as gold prices climbed on dollar weakness after the Federal Reserve cut interest rates for the third time this year.

In economic news, private sector credit in Australia was up 0.2 percent sequentially in September, the Reserve Bank of Australia said in a report, unchanged from the previous month.

Separately, official data showed that the total number of building approvals issued in Australia was up a seasonally adjusted 7.6 percent month-on-month in September.

Seoul stocks ended off their day’s highs after Samsung Electronics said its earnings would remain weak despite a recovery in chip sales.

The Kospi jumped more than 1 percent earlier in the day before ending the session up 3.21 points, or 0.2 percent, at 2,083.48. Samsung Electronics gave up early gains to end on a flat note.