MANILA, Philippines – Asian shares were mostly lower Tuesday as investors watched for details of a Japanese fiscal stimulus package. A decision by Australia’s central bank to cut its key interest rate failed to lift sentiment, and the recent decline in oil prices also weighed on trading.
KEEPING SCORE: Japan’s Nikkei 225 lost 1.5 per cent to 16,391.45. Australia’s S&P ASX 200 slid 0.8 per cent at 5,540.50. South Korea’s Kospi lost 0.5 per cent at 2,019.70. China’s Shanghai Composite Index edged up 0.1 per cent at 2,956.74 and India’s Sensex gained 0.4 per cent to 28,109.63. Most Southeast Asian markets fell. Hong Kong’s stock market was closed due to a typhoon.
AUSTRALIAN RATE CUT: The Reserve Bank of Australia cut its benchmark interest rate by a quarter of a percentage point to a record-low 1.5 per cent on Tuesday, seeking to jolt the nation’s sluggish economy amid low inflation rates. The board last cut rates in May, and economists had largely predicted Tuesday’s cut. “Of course, with rates already at a record low and household data high, monetary policy isn’t as powerful as before,” Paul Dales of Capital Economics said in an analysis.
JAPAN STIMULUS PACKAGE: The Japanese Cabinet was due later Tuesday to approve Prime Minister Shinzo Abe’s proposal, announced last week, of a 28 trillion yen ($272 billion) package of measures to help rev up the lagging economic recovery. Economists have noted that much of the money listed in the package may be already in the pipeline and massive construction projects have so far done little to sustain stronger growth.
ANALYST VIEWPOINT: Japanese stocks opened lower, “with a focus on the details of the 28 trillion yen stimulus,” said Chris Weston, chief market strategist with IG. “In terms of genuine fiscal stimulus measures the devil is in the details.”
WALL STREET: U.S. stocks wobbled and finished mostly lower Monday as the price of oil continued to nosedive thanks to the strong dollar. The Dow Jones industrial average fell 0.2 per cent to 18,404.51. The S&P 500 lost 0.1 per cent to 2,170.84. The Nasdaq composite gained 0.4 per cent to 5,184.20. The Dow and S&P 500 set all-time highs recently and the Nasdaq is within 1 per cent of the record it set in July 2015.
OIL: Benchmark U.S. crude gained 5 cents to $40.11 after settling at $40.06 a barrel in New York on Monday. Brent crude, which is used to price international oils, rose 17 cents to $42.31 a barrel in London, after closing at $42.14 a barrel the day before. As of Monday, the price of oil had fallen 13 per cent in a little more than two weeks.
CURRENCIES: The dollar fell to 102.22 yen from 102.39 the previous day. The euro rose to $1.1179 from $1.1166 on Monday.