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Published on Taipei Times http://www.taipeitimes.com/News/biz/archives/2006/08/27/2003325092 Asian investors take to the sidelines, keep eye on Fed AFP, HONG KONG Sunday, Aug 27, 2006, Page 10
Dealers said investors were hoping the speech at a Kansas City economic symposium would deliver some insights on the US economy amid mixed signals on the direction of interest rates and economic growth. Weak housing data has pointed to a sharper than expected slowdown in the world's largest economy and main export market for Asia. The data also suggests the Fed has scope to maintain its pause in interest rate hikes. However, with oil and commodity prices holding steady after record runs, a case remains that further rate hikes are warranted to keep inflation in check. Manila fared worst with a 1.71 percent slump on losses in the telecom sector while Sydney proved the best performer with 0.72 percent gain amid speculation a formal bid for retailer Coles Myer will shortly be made. Tokyo was perhaps the region's best indicator, rising a mild 0.14 percent, but across the markets dealers said anticipation ahead Bernanke's speech was cited for maintaining investor caution. Taipei share prices closed 0.37 percent lower at the day's low after a rebound following Wall Street's overnight gains fizzled.
Dealers said lingering concerns over opposition efforts to force President Chen Shui-bian ( The weighted index closed down 24.42 points at 6,526.22. Turnover was NT$59.50 billion (US$1.81 billion). Dealers said the market opened firmer in a reflex reaction to closing gains on Wall Street and following yesterday's slump on the local bourse, but the advance lacked follow-through and soon gave way to caution.
"Political factors grabbed the market's spotlight this week and such uncertainties will continue to be the main variable next week," said Johnny Lee, a manager with President Securities ( Tokyo share prices closed slightly lower, shedding early gains as investors turned cautious ahead of a speech from the US central bank chief. The NIKKEI-225 index closed down 21.96 points to 15,938.66. Volume was 1.49 billion shares, unchanged from Thursday. "The market is eagerly waiting to see Bernanke's latest analysis of the state of the US economy ... and how the US equity market will react," Chuo Securities market analyst Shinji Igarashi said. "The price movements will most likely continue to be influenced by developments in the US market," Igarashi added. Stocks got off to a weaker start after the inflation figures came in weaker than expected, and after a brief rally on bargain-hunting the NIKKEI ended below the symbolic 16,000 points level for a second straight day. The core consumer price index (CPI) increased 0.2 percent year-on-year last month, but the rise was less than the market had expected. Seoul share prices closed 1.04 percent higher after a two-day correction, with sentiment buoyed by renewed hopes for an end to US rate hikes. The KOSPI index closed up 13.62 points at 1,329.35. "The market made a solid rebound on growing hopes that the US Fed would no longer raise rates," Daishin Securities analyst Seong Jin-Kyung said. Hong Kong share prices closed 0.43 percent higher as select blue chips like China Mobile and HSBC led a technical rebound following the market's sharp fall on Thursday. The Hang Seng Index closed up 72.41 points at 16,955.45. Shanghai share prices closed flat with investors cautious ahead of a compensation plan to be issued by Sinopec covering the restructuring of its state share holdings on Monday. However, dealers said selected property developers were continuing to attract investor interest with a series of policies holding back growth in the sector believed to be coming to an end. The Shanghai A-share Index fell 0.02 points to 1,706.20 and the Shenzhen A-share Index was up 1.54 points or 0.37 percent at 420.88. The benchmark Shanghai Composite Index, which covers A and B-shares, closed up 0.02 points at 1,623.03. Sydney share prices closed up 0.72 percent amid speculation a formal takeover bid for Coles Myer was imminent and with bargain hunters moving in after Thursday's sharp fall. The SP/ASX 200 rose 35.8 points to 5,023.6. CMC Markets' senior dealer James Foulsham said the market bounced back after Thursday's sell-off as investors looked for bargains. Foulsham said Coles Myer drove the market upward, with speculation that a private equity consortium believed to be led by US buyout firm Kohlberg Kravis Roberts could make a formal takeover offer as early as Monday. Singapore share prices closed 0.29 percent higher on Friday. The Straits Times Index added 7.1 points to 2,453.21. In Kuala Lumpur share prices closed slightly higher in thin trade, with sentiment still fragile ahead of the central bank's interest rate decision due out later in the evening. An hour after the market had closed, Bank Negara Malaysia announced its overnight policy rates would remain unchanged at 3.5 percent. The composite index closed up 2.39 points at 950.52. Bangkok share prices closed 0.44 percent lower amid growing political confusion after police foiled what they said was an attempt to assassinate Thai Prime Minister Thaksin Shinawatra. The composite index fell 3.04 points to 689.13. Jakarta share prices closed 0.88 percent lower on extended profit-taking led by index heavyweight Astra International. The composite index dropped 12.554 points to 1,416.930. Manila share prices closed 1.71 percent lower as further losses in Philippine Long Distance Telephone dragged the main index down below the 2,300-point support level. The composite index finished 39.56 points down at 2,274.53. Wellington share prices closed 0.45 percent higher, with market leader Telecom leading the way. The NZX-50 gross index rose 15.55 points to 3,484.42. Mumbai share prices rose 0.35 percent in choppy trade as investors bought index and small-cap stocks, led by broadly positive Asian market trends.
The 30-share benchmark SENSEX index rose 40.25 points to 11,572.20.
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