Asian shares mostly higher after Wall Street gains

AP – Shares were mostly higher in Asia yesterday after advances for big technology companies carried Wall Street to further gains overnight.

Benchmarks rose modestly in Tokyo, Hong Kong and Seoul but the Shanghai Composite index was almost flat.

Investors are awaiting the outcome of the United States (US) Federal Reserve policy meeting.

The Federal Reserve’s policymakers are expected to keep the benchmark rate at nearly zero for some time to help the economy recover and will release a statement that economists said might change some of the language around its existing pledge to buy bonds to support markets.

“Asian markets already have a quiet look about them, as they remain in wait and see mode ahead of the latest FOMC rate decision that is released in the early hours of tomorrow morning,” Jeffrey Halley of Oanda said in a commentary.

Japan’s central bank has begun a policy meeting that will wrap up today but also is not expected to result in any major changes.

Japan reported that its trade balance swung into surplus in August as a 15 per cent decline in exports from a year earlier was outpaced by a 21 per cent drop in imports. Exports have been hammered by the coronavirus pandemic but the rate of decline has been narrowing over the past several months as shutdowns eased and the Chinese economy began to recover from a sharp downturn in early spring.

File photo shows a sign for a Wall Street subway station. PHOTO: AP

Japan’s long-serving prime minister, Shinzo Abe, resigned as of yesterday and was replaced by his chief cabinet secretary, Yoshihide Suga. Suga has said he intends to push ahead with Abe’s policies and little change is expected for the world’s third-largest economy.

Tokyo’s Nikkei 225 edged 0.1 per cent higher to 23,483.17 while the Hang Seng in Hong Kong also rose 0.1 per cent, to 24,763.29. South Korea’s Kospi climbed 0.2 per cent to 2,448.53 and the S&P/ASX 200 in Sydney jumped 0.7 per cent to 5,938.70. The Shanghai Composite index was almost flat, at 3,294.87.

Shares were mostly higher in Southeast Asia.

On Tuesday, the S&P 500 rose 0.5 per cent to 3,401.20 after gaining more than one per cent earlier in the session, its second straight sizable gain following the benchmark’ index’s worst week since June.

Big Tech stocks have been bouncing back this week after suddenly losing altitude earlier this month amid worries that their prices had climbed too high.

The Dow Jones Industrial Average inched up less than 0.1 per cent, to 27,995.60. The Nasdaq, which is heavily weighted with tech stocks, climbed 1.2 per cent to 11,190.32.

Stocks of smaller companies eked out a tiny gain, with the Russell 2000 index of small-caps picking up 0.1 per cent to 1,538.15. A report showed US industrial production strengthened last month, but not by as much as economists were expecting.

Analysts expect more volatility for stocks in the months ahead as the market navigates uncertainty over the outcome of the election, pessimism that Democrats and Republicans in Washington will be able to reach a deal to send more aid to unemployed workers and an economy still struggling amid the pandemic.

Treasury yields were relatively steady. The yield on the 10-year Treasury was at 0.66 per cent, down slighly from 0.67 per cent late Tuesday. The 30-year yield ticked up to 1.44 per cent from 1.41 per cent.

In other trading, US benchmark crude oil rose 69 cents to USD38.97 per barrel in electronic trading on the New York Mercantile Exchange. It surged USD1.02 on Tuesday to USD38.28 per barrel.

Brent crude, the international standard, picked up 62 cents to USD41.15 per barrel. The dollar fell to JPY105.29 from JPY105.43 late Tuesday. The euro slipped to USD1.1845 from USD1.1848.