News

Asian stocks down ahead of Fed meeting

BEIJING, China – Asian stock markets mostly lower Tuesday tracking Wall Street’s decline, as jittery investors awaited the U.S. Federal Reserve’s decision on interest rates and Britain’s vote on European Union membership.

KEEPING SCORE: Japan’s Nikkei 225 index fell 1.3 per cent to 15,809.22 points and Sydney’s S&P-ASX 200 lost 1.8 per cent to 5,219.30. Seoul’s Kospi retreated 0.4 per cent to 1,971.16 and benchmarks in New Zealand, Singapore and the Philippines also declined. The Shanghai Composite Index was unchanged at 2,833.18 and Hong Kong’s Hang Seng was flat at 20,527.81.

WALL STREET: Markets fell for a third day as investors awaited the Fed’s decision on interest rates and Britain’s EU referendum. LinkedIn shares jumped 47 per cent after Microsoft announced plans to buy the professional social networking company. Firearms makers climbed as investors wondered whether Sunday’s mass shooting in Orlando would lead to greater sales. The Dow Jones industrial average lost 132.86 points, or 0.7 per cent, to 17,732.48. The Standard & Poor’s 500 index fell 17.01 points, or 0.8 per cent, to 2,079.06 and the Nasdaq composite fell 46.11 points, or 0.9 per cent, to 4,848.44.

FED WATCH: The Fed had been expected to raise interest rates but now appears likely to wait and see how economic changes develop. The central bank’s two-day meeting starts Tuesday, with a decision on interest rates Wednesday. While last month many investors were betting that the Fed would hike rates, the two most recent monthly U.S. jobs reports put a damper on those expectations.

BREXIT: Stocks are under pressure from uncertainty about whether British voters will choose to leave the European Union in a June 23 referendum. Some polls show a majority are in favour of leaving, known informally as Brexit. Germany’s DAX closed down 1.8 per cent, France’s CAC-40 fell 1.9 per cent and the U.K.’s FTSE 100 lost 1.2 per cent.

CHINA WEAKNESS: Factory output and investment in May were weaker than expected, possibly hurt by slow foreign and domestic demand. Industrial production held steady at 6 per cent. Growth in investment in factories and other fixed assets weakened to 9.6 per cent in the January-May period from 10.5 per cent for the four months through April. “Momentum appears to be stalling after a solid start to 2016,” said Mizuho Bank in a report.

ENERGY: Benchmark U.S. crude fell 57 cents to $48.32 per barrel in electronic trading on the New York Mercantile Exchange. The contract lost 19 cents on Monday to close at $48.88. Brent crude, used to price international oils, dropped 48 cents to $49.87 per barrel in London. It shed 19 cents on Monday to $50.35.

CURRENCY: The dollar held steady at 106.05 yen. The euro edged up to $1.1296 from $1.1293.