Most Asian stocks slip ahead of Fed; Brent crude cracks $65

Asian markets drifted lower in Tuesday trade following a firm lead on Wall Street, which saw the Dow Jones industrial average close at a record high ahead of the Federal Reserve’s December meeting.

The Nikkei 225 drifted lower by 0.2 percent after hovering near the flat line earlier in the day. Gains were seen in trading houses and financials, as automakers and tech stocks traded mixed.

Across the Korean Strait, the Kospi edged down 0.53 percent. Several heavyweight tech names rose, but those gains were offset by losses seen in retailers and energy-related stocks. Samsung Electronics was up 0.5 percent, and Lotte Shopping was down 3.41 percent.

Kumho Tire stock jumped 8.09 percent following news about a potential takeover, Reuters said, citing local newspaper Hankyong.

Down Under, the S&P/ASX 200 tacked on 0.18 percent, with energy stocks climbing 1.08 percent and leading gains on the index following the rise in oil prices. Santos gained 0.79 percent, Oil Search was up 1.37 percent and Woodside rose 1.51 percent. Shares of ANZ were up 1.02 percent, outperforming other Australian financial shares, following news that the bank would be selling its life insurance business to Zurich Financial Services Australia. ANZ said proceeds of the sale would total 2.85 billion Australian dollars ($2.15 billion).

Hong Kong’s Hang Seng Index reversed early gains to slide 0.46 percent. Mainland markets also lost some ground. The Shanghai Composite was off 0.57 percent and the Shenzhen Composite was lower by 0.32 percent.

Markets in the region also likely took note of better-than-expected China credit data released Monday. New yuan loans for November came in at 1.12 trillion yuan ($169 billion), above the 800 billion yuan forecast in a Reuters poll, the news agency said.

Investors are focused on the Federal Reserve’s upcoming two-day policy meeting, with its interest rates decision due Wednesday U.S. time. Most are expecting an interest rate hike from the central bank and all eyes will be on FOMC members’ views on the outlook for the U.S. economy.

Ahead of that meeting, U.S. markets on Monday shook off early jitters following a terror incident to end higher ahead of Asia’s Tuesday trading day. The Dow Jones industrial average rose 0.23 percent, or 56.87 points, to finish at a record close of 24,386.03.

Meanwhile, the dollar was steady against a basket of rivals, with the dollar index at 93.932 at 12:30 p.m. HK/SIN after sliding as low as 93.666 during the Monday session. Against the yen, the greenback was stable at 113.50.

“Despite firmer U.S. Treasury yields, the dollar lacked the conviction to move higher ahead of the FOMC statement,” Terence Wu, economist at OCBC, said in a note. He added that the dollar could edge higher if the Fed was less dovish than markets expect, as “short- and long-end global yield differentials remain supportive” of the currency.

The New Zealand dollar held onto gains after getting a boost following a Monday announcement that Adrian Orr would be appointed as the Reserve Bank of New Zealand’s governor. The Kiwi dollar traded at $0.6924 at 12:36 p.m. HK/SIN, above Monday’s close of $0.6910 and after popping as high as $0.6936 earlier.

In commodity markets, oil prices resumed their climb after rising to their highest levels in more than two years overnight following news that Britain’s Forties Pipeline would be shut. The pipeline carries around 450,000 barrels a day of Forties crude from offshore fields in the North Sea to a processing plant in Scotland.

Brent crude futures rose 1 percent to trade at $65.34 per barrel, cracking the $65 level for the first time since 2015. Brent had risen some 2 percent in the previous session. U.S. West Texas Intermediate advanced 0.5 percent at $58.28 per barrel.

SoftBank Group will invest around an additional $500 million in satellite broadband company OneWeb, the Wall Street Journal reported on Monday, citing a source. The increase in funds will mean SoftBank’s total investment in OneWeb totals $1.5 billion, the Journal said. Shares of SoftBank shed 0.27 percent.

Elsewhere, shares of Toshiba were up 1 percent, outperforming most peers in the tech sector in Japan after the company said it had not come to a consensus over a dispute with Western Digital. On Monday, Argyle Street Management, an activist investor in Toshiba, told the troubled Japanese company it did not have to sell its memory chip arm to a consortium led by Bain, Reuters reported. Argyle made the remarks after Toshiba received a recent cash injection, the news agency added.

Meanwhile, Chinese property developer Country Garden Holdings said it would be withdrawing its application for plans to list a subsidiary on the Shanghai Stock Exchange.

The company cited a “change in the policies of the approval authorities” in China as the reason for its decision, according to a filing. Country Garden stock was down 1.56 percent in the morning as other Hong Kong-listed property names trended lower.

Source: CNBC