Shares wobble on uncertainty over US stimulus
TOKYO (AP) — Shares were mixed in Asia on Tuesday as investors watched for signs of a possible change in U.S. stimulus efforts by the Federal Reserve.
Asia's biggest benchmark, Japan's Nikkei stock average, shed early gains to fall 0.2 percent by early afternoon, to 13,007.28. Hong Kong's Hang Seng index dropped 0.3 percent to 21,153.06, while South Korea's KOSPI index recovered from early losses to gain 0.9 percent at 1,900.62.
Japanese shares have tended to gain as the yen falls, on expectations a weaker currency will help heavyweight exporters like Toyota Motor Corp. and Sony.
Shares advanced Monday on growing expectations that the U.S. Federal Reserve will maintain its current policy stance when policymakers meet this week. But that optimism appears to be wavering.
"There is still some selling pressure but overall the markets are sidelined. Investors are quite cautious about the Federal Reserve meeting," said Linus Yip, a strategist at First Shanghai Securities in Hong Kong. "The market will wait."
Markets have gyrated in recent weeks on worries the Fed might choose to start cutting back on the volume of its financial asset purchases, which are intended to encourage spending and investment by helping to keep interest rates low.
Investors were spooked when Fed chairman Ben Bernanke suggested the U.S. central bank might ease its aggressive support for the U.S. economy if indicators such as hiring improve. Markets across Asia were hit by sharp drops in share prices as investors pulled back from emerging markets.
But on Tuesday, shares rose in Singapore, Malaysia, Taiwan, Indonesia, mainland China and New Zealand. Benchmarks in India and Australia fell.
A meeting of leaders from the Group of Eight top industrial countries in Northern Ireland appeared to have little impact on the markets given the gathering's main focus on diplomatic issues such as Syria and North Korea.
In the U.S., the Dow Jones industrial average gained 0.7 percent to 15,179.85 while the broader S&P 500 index rose 0.8 percent to 1,639.04.
Oil prices fell ahead of the Fed's meeting, with the benchmark New York rate down 20 cents at $97.57. The contract fell 8 cents to finish at $97.77 a barrel on the Nymex on Monday.
In currencies, the euro rose to $1.3342 from $1.3340 late Monday in New York. The dollar rose to 94.96 yen from 94.86 yen.