Asian stocks take cues from Wall Street slump

Asian markets were weaker on Tuesday, as investors stayed cautious following the overnight pullback on Wall Street and ahead of a two-day Federal Reserve policy meeting.

In Tokyo, the Nikkei 225 fell 0.5 percent, or 106.37 points, tracking declines seen stateside, but paring some of the more than 200-point losses seen earlier. Tuesday’s move lower also extended the Nikkei’s decline in the last session amid an ongoing political scandal that’s hurting public support for Prime Minister Shinzo Abe.

Most sectors recorded declines, although trading houses, banks and automakers traded higher. The broader Topix index edged lower by 0.21 percent.

Elsewhere, Seoul’s benchmark Kospi was off by 0.11 percent. Heavyweight tech names were softer following the slump in tech names stateside overnight, with Samsung Electronics lower by 0.24 percent, although that was partially offset by a strong showing among manufacturing names.

Steelmakers traded mixed following news from Yonhap News Agency that South Korea is requesting for an exemption from recently announced U.S. steel tariffs.

The Hang Seng Index slipped 0.54 percent and on the mainland, the Shanghai composite shed 0.26 percent while the Shenzhen composite edged down by 0.55 percent.

Sydney’s S&P/ASX 200 slipped by 0.43 percent. Most sectors were in the red, with losses led by the 1.46 percent fall in materials stocks. The heavily weighted financials subindex held just above the flat line, adding 0.07 percent.

“Amid ongoing concerns with regards to the U.S. administration as well as the potential for heightened global trade tensions, expect investor sentiment to remain fragile intraday and ahead of the FOMC,” Emmanuel Ng, an economist at OCBC Bank, said in a note.

Stocks stateside closed lower on Monday, with losses led by the Nasdaq composite’s 1.84 percent fall.

The index recorded its worst day since Feb. 8 as Facebook sank 6.8 percent on the back of a scandal involving data analytics firm Cambridge Analytica. Cambridge Analytica accessed the data of 50 million Facebook users without their permission, reports said.

Ahead, markets are focused on a two-day Federal Open Market Committee policy meeting that begins on Tuesday U.S. time. The Federal Reserve is expected to hike interest rates for the first time in 2018 at the end of that meeting.

The probability of a 25 basis point interest rate hike on Wednesday stood at 94.4 percent, according to the CME Group’s FedWatch Tool on Tuesday Asia time.

Despite that, the dollar was mostly steady, with the dollar index standing at 89.912 by 12:34 p.m. HK/SIN, near its overnight low of 89.872 and below levels around the 90 handle seen at the end of last week.

That came as sterling firmed after the U.K. and the European Union reached an agreement on the transition period before the former exits the bloc.

Meanwhile, the euro strengthened following news from Reuters that the European Central Bank was steadily focusing more on discussion on future interest rates.

Both currencies slightly extended overnight gains, with the common currency trading at $1.2340 and the pound at $1.4028.

In individual stocks, Singapore-listed commodities trader Noble Group fell 11.71 percent. The move lower extended losses seen in the last session after the company said it would not be able to pay $379 million in debt notes due in 2018, Reuters reported. Source: CNBC

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