Asian stock markets show mixed reaction awaiting Fed interest rate decision

Stock market

Investors are awaiting the U.S. Federal Reserve’s interest rate decision which is set to be released later stateside thus, stocks in the Asia Pacific were mixed on Wednesday

Shares were up on the day in mainland China, as the Shanghai composite gained 0.25% to approximately 2,985.66 and the Shenzhen component added 0.31% to 9,753.31. The Shenzhen composite also rose 0.258% to about 1,655.61.

Hang Seng index of Hong Kong was fractionally higher, as of its final hour of trading.

On Wednesday, Anheuser-Busch InBev began taking orders in its second attempt to spin off its Asian business in Hong Kong, aiming to raise to $6.6 billion in its Budweiser listing. It could be the world’s second-largest IPO this year. The company said in a statement, Budweiser APAC is set to price the IPO September, 23, and the stock will debut on September, 30.

The brewing giant said on Tuesday it would offer 1.3 billion shares at between HK$27 and HK$30 ($3.45 to $3.83) apiece.

Elsewhere, the Nikkei 225 in Japan slipped 0.18% on the day to 21,960.71 while the Topix fell 0.49% to close at 1,606.62. Data showed Wednesday that Japan’s exports fell 8.2% year-on-year in August, less than expectations of a 10.9% decrease by economists in a Reuters’ poll.

South Korea’s Kospi ended its trading day 0.41% higher at 2,070.73. Over in Australia, the S&P/ASX 200 slipped 0.2% to close at 6,681.60. Australian-listed shares of adventure goods retailer Kathmandu jumped 7.6% after the company reported a more than 13% year-on-year jump in its net profit after tax.

Overall, the MSCI Asia ex-Japan index was up 0.15%.

Fed decision awaited
Investors awaited the Fed’s latest decision on monetary policy, set to be released on Wednesday stateside. The U.S. central bank is widely expected to cut rates by 25 basis points. That would be its second rate cut of 2019.

On Wednesday, Fed Chair Jerome Powell will likely say that the cut in interest rates is a “mid-cycle correction” and not the “first of a series of cuts,” Hugh Johnson, chairman and chief investment officer at Hugh Johnson Advisors, told CNBC’s “Street Signs”.

He said “What’s important is that the markets are now pricing in not three cuts as they once were, that was three weeks ago. Now they’re pricing in that there’ll probably be this cut and maybe one more, and it might be December, it might be March of 2020.”
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