Global shares slip ahead of Fed view on US economic outlook

TOKYO (AP) — Global shares mostly fell in muted trading yesterday as world markets cautiously awaited the United States (US) central bank’s latest assessment on the economy.

France’s CAC 40 slipped 0.1 per cent in early trading to 6,048.72, while Germany’s DAX gained nearly 0.1 per cent to 14,568.97. Britain’s FTSE 100 dipped 0.4 per cent to 6,779.67. US shares were set to be little changed with Dow futures at 32,727. S&P 500 futures were less than 0.1 per cent lower at 3,951.12.

Japan’s benchmark Nikkei 225 inched down less than 0.1 per cent to finish at 29,914.33. South Korea’s Kospi slipped 0.6 per cent to 3,047.50. Australia’s S&P/ASX 200 dipped 0.5 per cent to 6,795.20. Hong Kong’s Hang Seng was little changed inching up less than 0.1 per cent at 29,034.12, while the Shanghai Composite was also little changed, but down less than 0.1 per cent at 3,445.55. Investors are awaiting the Federal Reserve’s economic and interest rate projections, expected later in the day. Economists expect Fed Chair Jerome Powell will try to convince jittery financial markets that the central bank can continue providing support without igniting inflation. Those worries have recently pushed bond yields higher, sapping buying demand for shares.

The Fed meeting “carries the potential to either allay or heighten some of the market’s recent concern with regard to the soaring bond yields”, said senior market strategist at IG in Singapore Jingyi Pan.

Senior market analyst Asia Pacific at OANDA Jeffrey Halley said US Secretary of State Antony Blinken’s comments about China, while visiting Japan and South Korea, also dampened regional sentiments.

A man walks past a bank’s electronic board showing the Hong Kong share index at Hong Kong Stock Exchange. PHOTO: AP

“The comments suggest that relations between the two superpowers remain as troubled as ever and does not bode well for the meeting tomorrow and Friday between senior officials of both countries. That state of affairs is adding to the glum mood on the China Mainland,” Halley said.

Blinken, after he and Defence Secretary Lloyd Austin met on Tuesday with their Japanese counterparts, denounced China, saying, “We will push back if necessary, when China uses coercion or aggression to get its way.”

Wall Street capped a choppy day of trading with indexes closing mostly lower. Losses by banks, industrial stocks and companies that rely on consumer spending, including cruise line operators, outweighed gains by Big Tech and communication services stocks.

The S&P 500 dropped 0.2 per cent to 3,962.71. The Dow Jones Industrial Average lost 0.4 per cent to 32,825.95. The Nasdaq bucked the trend, benefitting from the rally in technology stocks and rising 0.1 per cent to 13,471.57. The big technology names that soared in 2020 were among the gainers. Apple rose 1.6 per cent Google’s parent Alphabet added 1.4 per cent and Facebook rose two per cent.