Asia markets weaker ahead of Fed decision; China economic data disappoint

HONG KONG (AP):

Asian stocks mostly declined yesterday as markets awaited a decision on interest rates by the Federal Reserve, while China reported that manufacturing contracted in January for a fourth straight month.

United States (US) futures were mixed, while oil prices fell back.

Japan’s Nikkei 225 fell 0.3 per cent to 35,975.50.

South Korea’s Kospi shed 0.2 per cent to 2,494.30 after Samsung Electronics reported an annual 34 per cent decline in operating profit for the last quarter.

Hong Kong’s Hang Seng dipped 1.1 per cent to 15,536.00, while the Shanghai Composite shed 0.4 per cent to 2,819.91.

Official data showed China’s manufacturing purchasing managers index, or PMI, rose to 49.2 in January, up from 49.0 in December, but still below the critical 50 mark that indicates expansion rather than contraction. Weak demand in the world’s second-largest economy is dragging on growth.

Australia’s S&P/ASX 200 added 0.8 per cent to 7,657.20 after a survey showed Australia’s inflation rate fell to a two-year low in the December quarter, with the consumer price index at 4.1 per cent, leading to bets that the Reserve Bank may consider an interest rate cut in the next move.

In Wall Street, US stocks drifted through a quiet Tuesday and held near their record heights following a mixed set of profit reports.

The S&P 500 slipped 0.1 per cent from its record to 4,924.97. The Dow Jones Industrial Average gained 0.3 per cent to 38,467.31, and the Nasdaq composite fell 0.8 per cent to 15,509.90.

UPS slumped 8.2 per cent, even though it reported stronger profit for the latest quarter than analysts expected. Its revenue fell short of Wall Street’s estimates, and it also gave a forecast for full-year revenue in 2024 that was weaker than expected.

Whirlpool sank 6.6 per cent despite likewise reporting a better profit than expected. Its forecast for 2024 revenue of $16.9 billion was roughly $1 billion below analysts’ estimates.

Helping to offset those losses was General Motors. The automaker jumped 7.8 per cent after reporting stronger profit and revenue than expected.

Treasury yields were also mixed in the bond market following reports that showed the economy remains stronger than expected. One said confidence among consumers is climbing, while another suggested the job market may be warmer than forecast.

The US’ employers advertised nine million job openings at the end of December, which was a touch more than economists expected and slightly above November’s level. Traders were expecting the data to show a cooldown in the number of openings.

A drawdown would have fit more neatly into the trend that’s carried Wall Street to a record: a slowdown in the economy’s growth strong enough to keep a lid on inflation, but not so much that it will create a recession.

Hopes for the continuation of such a trend is what has Wall Street foaming about the possibility of several cuts to interest rates by the Federal Reserve this year. Cuts would mark a sharp turnaround from the Fed’s dramatic hikes to rates over the last two years, and the reductions would give a boost to the economy and investment prices.

In energy trading, benchmark US crude lost 32 cents to $77.50 a barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the international standard, fell 40 cents to $82.10 per barrel.

In currency trading, the US dollar rose to 147.73 Japanese yen from 147.59 yen. The euro cost $1.0821, down from $1.0845.

AP