Asian markets were mostly lower on Wednesday as investors waited for an update
on the US economy from the US Federal Reserve.
The results of a two-day Fed policy meeting will likely ripple through stock markets once investors learn whether there will be changes in the US central bank's strategy for shoring up the world's No. 1 economy. The meeting is set to wrap up on Wednesday in Washington.
Stocks in Hong Kong, mainland China and Seoul went south. Hong Kong's Hang Seng index was down 1.2 per cent to 20,966.89, while South Korea's KOSPI index shed 0.9 per cent to 1,884.03. Shares fell in New Zealand, the Philippines, Singapore and Indonesia.
Worries that the Fed may scale back its bond purchase program made shares in emerging markets sway in recent days.
Super-easy monetary policies by central banks in advanced economies like the US prompted money to flow into Asian markets, which could see a reversal when the global central banks unwind their aggressive stimulus programs.
"Foreign investors are selling more shares
than they are buying but trading volume remains thin," said Kim Hyoung-ryoul, a market analyst at Kyobo Securities Co. in Seoul. "As the result of the Fed meeting comes out early Thursday morning in South Korea, the market is reflecting a wait-and-see attitude."
Asia's heavyweight Japan was a rare bright spot. The Nikkei 225 stock average added 0.8 per cent to 13,113.59 while Australia's S&P/ASX 200 index was up 0.7 per cent to 4,848.10. Benchmarks in Taiwan and Thailand also rose.
For weeks now, markets have been gripped with uncertainty over whether the Fed will start reducing its financial assets purchases. The Fed's super-easy monetary policy has helped drive sentiment in the markets.
Any reduction - so-called tapering - could spook investors who have become accustomed to seeing much of the money generated by the policy ending up in financial markets.
The uncertainty was caused by comments made by Fed chairman Ben Bernanke in May and investors will be hoping for a clearer picture at the end of the meeting Wednesday.
Though no change is expected, investors will be looking for a clearer line in the accompanying Fed statement and in Bernanke's post-meeting press conference.
On Tuesday, the FTSE 100 index of leading British shares ended 0.7 per cent higher at 6,374, while Germany's DAX rose 0.2 per cent to 8,229. The CAC-40 in France was barely changed, down 0.08 per cent at 3,860.
On Wall Street, the Dow Jones industrial average rose 0.9 per cent, to close at 15,318.23 on Tuesday. The Standard & Poor's 500 index rose 0.8 per cent to 1,651.81. The Nasdaq composite index rose 0.9 per cent to 3,482.18.
Benchmark oil for July delivery fell 16 cents to $98.27 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose 67 cents to close at $98.44 a barrel on the Nymex on Tuesday.
In currencies, the euro fell to $1.3388 from $1.3405 late Tuesday in New York. The dollar fell slightly to 95.21 yen from 95.27 yen.