Inside Financial Markets

Asian Stocks Swing as BOJ Refrains From Expanding Stimulus

asia stock upAsian Stocks Swing as BOJ Refrains From Expanding Stimulus

Asian stocks swung between gains and losses as investors weighed corporate earnings before the Federal Reservedecides on U.S. monetary policy. The Bank of Japan refrained from expanding stimulus.

Aluminum Corporation of China Ltd., the nation’s biggest producer of the lightweight metal, fell 3.1 percent in Hong Kong after its first-quarter loss widened. Woolworths Ltd. slipped 1.9 percent as food and liquor sales by the Australian retailer fell short of expectations. Kyocera Corp. climbed 3.8 percent in Tokyo after the electronics and solar-panel maker reported full-year profit that beat analyst estimates.

The MSCI Asia Pacific Index was little changed at 137.42 as of 1:06 p.m. in Tokyo, erasing an earlier gain of 0.4 percent. The measure is heading for a 0.4 percent loss this month amid concern over escalating tensions in Ukraine and a deepening economic slowdown inChina. The BOJ stuck with targeting an annual increase in the monetary base of between 60 trillion yen and 70 trillion yen ($683 billion) in a decision released today. Fed policy makers are expected to reduce bond buying for a fourth straight month today.

“We don’t expect much from the two central banks as nothing much has changed since the last meetings,” Keith Poore, who helps manage $131 billion as Wellington-based head of investment strategy at AMP Capital Investors Ltd., said by phone before the BOJ announcement. “While earnings have been good, Asian investors are waiting to see a bit more recovery in China before optimism can return.”

China Manufacturing

A government report due tomorrow is expected to show China’s manufacturing activity continued to pick up in April. Data today showed Japan’s industrial output grew less than forecast in March, while factory output growth in South Korea missed analysts’ estimates. Companies from Nomura Holdings Inc. to Japan Airlines Co. release earnings today.

Taiwan’s Taiex index lost 0.8 percent as the nation’s economy expanded 3.04 percent in the first quarter, in line with economists’ estimates. South Korea’s Kospi index lost 0.1 percent. Australia’s S&P/ASX 200 Index was little changed.

Hong Kong’s Hang Seng Index retreated 1.2 percent after yesterday jumping by most in three weeks. The Hang Seng China Enterprises Index of mainland stocks traded in the city dropped 1 percent and China’s Shanghai Composite was little changed.

Japan’s Topix index rose 0.1 percent and New Zealand’s NZX 50 Index jumped 1.1 percent.Singapore’s Straits Times Index (FSSTI) gained 0.7 percent, heading for its third monthly advance, as lenders led the market higher. DBS Group Holdings Ltd. rose 0.9 percent to S$16.99 after Southeast Asia’s biggest bank posted an unexpected increase in first-quarter profit.

Relative Value

The MSCI Asia Pacific Index traded at 12.6 times estimated earnings yesterday, compared with 16 for the Standard & Poor’s 500 Index, according to data compiled by Bloomberg.

Futures on the S&P 500 fell 0.2 percent today. The U.S. equity benchmark index climbed 0.5 percent yesterday as results from Merck & Co. to Sprint topped estimates.

Of the 216 companies on the MSCI Asia Pacific Index that have posted results since the beginning of the month and for which estimates are available, 46 percent missed expectations for profit, according to data compiled by Bloomberg

Sanie Khan

Sanie Khan holds a deep knowledge of the financial markets in Pakistan. Based in Karachi, he has over 20 years of hands-on management experience in financial technologies and managing operations in the financial sector. He was the General Manager at the Pakistan Stock Exchange (PSX) for 17 years. He along-with senior members of Exchange

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Inside Financial Markets was a joint publication of Pakistan Stock Exchange (PSX)and Society of Technical Analysts Pakistan (STAP)