Stocks in Asia mixed as investors await Fed meeting
Mainland Chinese stocks were mixed on the day, with the Shenzhen composite down 0.195% to 1,502.12 and Shenzhen component slipping 0.33% to 8,780.87. The Shanghai composite on the other hand, rose 0.2% to 2,887.62.
In Hong Kong, the Hang Seng index rose around 0.5% as of its final hour of trade, a day after large crowds gathered to demand that the city’s top official step down after she suspended — but didn’t withdraw — a controversial extradition bill.
One investor told CNBC that the situation in Hong Kong will likely have limited impact on markets as they are focused on the “bigger picture” at present.
”“If you really pin it down, I think they are really focused on two things: One is of course the trade tensions, that has a bigger impact on not only Hong Kong but the rest of the region and the world. And interest rates, I think this week we got a Fed meeting, everybody’s watching it very closely,” Haren Shah, managing director and head of investments at Taurus Wealth Advisors, told CNBC’s “Street Signs” on Monday.
Over in Japan, the Nikkei 225 in Japan closed just above the flatline at 21,124.00, while the Topix slipped 0.45% to end its trading day at 1,539.74. Shares of Apple supplier Japan Display plunged 7.02% after the company announced that Taiwanese flat screen maker TPK Holding had decided against investing in it.
In South Korea, the Kospi shed 0.22% to close at 2,090.73, while Australia’s ASX 200 fell 0.35% to cap its trading day Down Under at 6,530.90.
Asia-Pacific Market Indexes Chart
|NIKKEI||Nikkei 225 Index||NIKKEI||21124.00||7.11||0.03|
|HSI||Hang Seng Index||HSI||27227.16||108.81||0.40|
|ASX 200||S&P/ASX 200||ASX 200||6530.90||-23.10||-0.35|
|CNBC 100||CNBC 100 ASIA IDX||CNBC 100||7765.06||-20.84||-0.27|
The latest data from China comes as Beijing remains locked in a trade war with Washington, raising concerns over a slowdown in the former’s economy.
Investors are also looking ahead to an upcoming meeting by the Fed, amid expectations that the U.S. central bank could be cutting interest rates soon.
But there are three factors that could result in the U.S. central bank not moving on interest rates this time, according to Fed watchers: The looming G-20 summit at which the U.S. and China, at least theoretically, could reach a trade agreement; a desire not to be seen as overly influenced by the financial markets and U.S. President Donald Trump’s hectoring; and the desire to avoid making December’s rate hike look like a policy mistake.
“I think what we’re going to learn this week is just how patient the Fed is gonna continue to be and I think that’s probably the keyword. We’re gonna be looking in the statements to see whether they continue to use the word patient in terms of their monitoring of the economic data or whether, if that word is not there, I think that will be some hint ... that the Fed is getting ready ... to act in one way or another,” Christopher Smart, head of macroeconomic and geopolitical research at Barings, told CNBC’s “Squawk Box” on Monday.
The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 97.569 after rising from levels below 96.8 last week.
The Japanese yen traded at 108.56 against the greenback after seeing levels below 108.2 in the previous trading week. The Australian dollar changed hands at $0.6875 after its decline from levels above $0.700 last week.
Oil prices slipped in the afternoon of Asian trading hours after earlier rising. International benchmark Brent crude futures declined 0.58% to $61.65 per barrel, while U.S. crude futures shed 0.48% to $52.26 per barrel.
— Reuters and CNBC’s Jeff Cox contributed to this report.
European stocks close marginally higher; Lufthansa falls 12% and drags airlines down
European Markets: FTSE, GDAXI, FCHI, IBEX
Airline stocks plunged after Lufthansa issued a profit warning, causing its shares to fall nearly 12% and dragging Germany’s DAX into the red. Air France KLM and EasyJet both dropped 4%.
Major airlines were also in the spotlight elsewhere as the Paris Air Show kicked off Monday, with Airbus announcing a new plane, while Boeing CEO Dennis Muilenburg said the safe return of its best-selling plane, the 737 Max, was the company’s most important objective. Airbus shares were up 2%.
Investors are anticipating the Federal Reserve’s two-day monetary policy meeting — set to begin on Tuesday — with many expecting it to cut interest rates soon, if not necessarily this week. Stocks on Wall Street were trading higher on Monday as investors awaited the U.S. central bank’s policy update.
Back in Europe, Deutsche Bank is preparing to create a 50 billion euro ‘bad bank’ as chief executive Christian Sewing shifts Germany’s biggest lender away from investment banking, according to the Financial Times. Shares of Deutsche Bank ended the session 0.5% lower.
Meanwhile, shares of 1&1 Drillisch tumbled toward the bottom of the European benchmark, losing 9% despite winning spectrum in Germany’s 5G mobile auction last week. Parent company United Internet also lagged, with shares falling by more than 7% on Monday.
In the U.K., the search for a replacement for British Prime Minister Theresa May continued. In a live TV debate on Sunday, candidates took aim at favorite Boris Johnson over his promise to take Britain out of the European Union with or without a deal on October 31.
Sterling was trading lower against the dollar on Monday, falling to $1.2563 amid the ongoing uncertainty around Brexit and Britain’s domestic politics.