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Asian shares mostly steady ahead of Fed, Nikkei up on weaker yen

Published 06/17/2014, 11:57 PM
Updated 06/18/2014, 12:02 AM
Asian shares steady

Investing.com - Asian shares held mostly steady on Wednesday ahead of the U.S. Federal Reserve's policy statement later in the day, though a weaker yen helped Japanese shares.

The Nikkei 225 gained for a second straight day, up 0.4%, amid yen weakness.

In Hong Kong, the Hang Seng Index was flat, with Chinese property developers down after signs of further weakness in China's housing market. Average new home prices rose 5.4% from a year earlier in May, compared with a 6.4% gain in April.

China Resources Land Ltd (HK:1109) fell 0.7% in Hong Kong, Evergrande (HK:3333) Real Estate Group fell 1.8%.

In Australia, the S&P/ASX 200 lost 0.1% as resource companies remained in focus.

Woodside Petroleum Ltd (ASX:WPL) fell 3.7% in Sydney after the oil company resumed trading following Royal Dutch Shell A (AMS:RDSa) sale of a 9.5% stake in the firm to institutional investors. That move weighed on the broader market on Tuesday, as investors sold shares in other companies to take part in the deal.

Elsewhere in Asia, South Korea's KOSPI was down 0.3% and the Shanghai Composite fell 0.3%.

Overnight, U.S. stocks rose after an uptick in consumer prices fueled hopes the Federal Reserve's statement on monetary policy due out on Wednesday will provide a largely positive take on the U.S. economy.

The Dow 30 rose 0.16%, the S&P 500 index rose 0.22%, while the NASDAQ Composite index rose 0.37%.

The Labor Department reported earlier that the U.S. consumer price index rose 2.1% on year in May and rose 0.4% from April. Consumer prices rose at their fastest pace since October 2008, which sparked demand for the greenback.

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Market expectations had been for an annual increase of 2.0% and a monthly rise of 0.2%.

Firming inflation rates should prompt the Federal Reserve to continue winding down its monthly bond-buying program and later raise benchmark interest rates from current record lows as the economy gains steam.

The Fed will conclude a two-day policy meeting on Wednesday, and the U.S. central bank is seen scaling back its asset-purchasing program by another $10 billion, though hikes to benchmark interest rates won't come until sometime in 2015.

A separate report showed that both U.S. housing starts and building permits fell in May, pointing to underlying weakness in the housing sector.

The Commerce Department reported that housing starts dropped by 6.5% last month to 1.001 million units, while the number of building permits issued last month fell by 6.4% to 991,000 units, though markets focused on inflation data instead.

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