Asian stocks fall as China rate cut effect fades and investors await OPEC, US data
Asian stocks mostly fell Tuesday as the boost from China's surprise interest rate cuts faded and investors awaited U.S. economic data and an OPEC meeting.
KEEPING SCORE: Australia's S&P/ASX 200 fell 0.5 percent to 5,334.80 and Hong Kong's Hang Seng was down 0.3 percent at 23,816.47. Most Southeast Asian stock markets were lower but Japan's Nikkei 225 gained 0.3 percent to 17,407.62 while South Korea's Kospi inched up 0.1 percent 1,980.21.
CHINA EFFECT: Asian stocks climbed Monday when they had their first opportunity to react to China's announcement late Friday of interest rate cuts. The perception of concerted efforts by central banks to support economic growth was also reinforced by the European Central Bank. Its President Mario Draghi's said he was willing to step up the bank's efforts to stimulate the region's struggling economy.
ANALYST'S TAKE: "U.S. markets edged higher overnight, extending record levels, but there was little new in the way of catalysts, said Will Leys, a sales trader at CMC Markets. "Global sentiment remains mildly positive on the back of last week's stimulus double play out of China and Europe."
KURODA: Japan's top central banker Haruhiko Kuroda said Bank of Japan is committed to achieving a target of 2 percent inflation and that he expects companies to make their decisions based on that plan. He urged a group of business people in central Japan to boost wages and investment to help overcome deflation. Some analysts saw his remarks as considering expanding the scope of easing to reach the target.
OPEC MEETING: The major event this week is a meeting of members of the Organization of Petroleum Exporting Countries in Vienna on Thursday as the price of oil continues to slump. Traders will be looking for a possible agreement to cut production to shore up prices. The price of crude has tumbled 26 percent since June as producers kept output stable while demand in Europe and other markets weakened.
ECONOMY REPORTS: The U.S. Commerce Department is scheduled to release its second of three estimates of how fast the U.S. economy grew in the July-September quarter. The first estimate showed that the economy expanded at an annual rate of 3.5 percent, outpacing most other developed countries. Some analysts believed the estimate will be slightly lowered. Germany, the largest economy in the euro common currency area, will likely confirm its growth figure at 0.1 percent growth from the previous quarter.
WALL STREET: The stock market eked out another record close Monday as investors remained confident that stimulus from central banks would revive global growth. Retail stocks rose ahead of the crucial holiday season. The Standard & Poor's 500 rose 0.3 percent to 2,069.41. The Dow Jones industrial average inched up less than 0.1 percent to 17,817.90. The Nasdaq composite gained 0.9 percent to 4,754.89.
ENERGY: Benchmark U.S. crude was up 1 cent to $75.79 per barrel in electronic trading on the New York Mercantile Exchange. The contract lost 73 cents to settle at $75.78 on Monday. Brent crude, a benchmark for international oils, was down 15 cents to $79.53 a barrel on the ICE Futures exchange in London.
CURRENCIES: The dollar fell to 117.93 yen from 118.28 yen late Monday. The euro was little changed at $1.242 from $1.243.