Most SE Asia stocks fall on profit-booking ahead of Fed meet

Lloyd Doyle
September 21, 2017

That marked a rise of 22 basis points from 10-month lows set on September 8, when USA bond yields fell on risk aversion, partly stemming from concerns about U.S.

The main global event this week is a possible announcement on Wednesday by the Fed that it will begin unwinding its $.4.5-trillion balance sheet.

CURRENCIES: The euro was up 0.1 percent at $1.20 while the dollar fell 0.2 percent to 111.31 yen.

The Bank of Japan is widely expected to maintain its massive asset buying campaign at a meeting on Thursday.

Political uncertainty may have a part to play in the BOJ's thinking.

Yellen is likely to emphasize that normalizing the balance sheet is going to be gradual so as to avoid disrupting markets, said Paul Ashworth, chief North American economist for Capital Economics.

Traders noted that the Japanese market should be supported by expectations for a snap election that is expected on October 22, but has not been formally called. It traded at 53.77 British pence from 53.80 pence yesterday as Bank of England governor Mark Carney gave a speech reiterating his view that interest rates in the United Kingdom will need to rise soon.

Reflecting concerns about the recent hurricanes, the National Association of Home Builders released a report on Monday showing a bigger than expected drop in USA homebuilder confidence in the month of September. The European Central Bank is meanwhile expected to shed more light on plans to exit its extraordinary stimulus next month.

The S&P 500 ended slightly higher on Monday as financial stocks rose ahead of a Federal Reserve meeting, but the Nasdaq pared gains sharply as technology stocks lost ground late in the session.

Traders were also cautious amid potentially higher tensions between the U.S. and North Korea following hawkish statements from U.S. President Donald Trump. The contract rose 93 cents, or 1.9 percent, to settle at $50.41 a barrel on Wednesday.

Singapore shares fell 0.5%, dragged by top lenders Oversea-Chinese Banking Corporation and United Overseas Bank. Zions Bancorporation climbed 70 cents, or 1.6 percent, to $45.11.

The two firms had come under pressure in recent days, amid a fuel crisis resulting from the severing of a fuel pipeline between the large Marsden Point refinery in the Northland region, and the country's commercial and population centre of Auckland.

That nudged MSCI's index of world stocks to a new all-time high while futures prices pointed to a new record high on Wall Street. The FTSE 100 index of leading British shares rose 0.4 percent to 7,278.

Talk of monetary tightening and a bounce in the dollar put gold on the defensive.

US crude futures were down 1 cent at $49.90 per barrel, within sight of Thursday's almost four-month high of $50.50.

The pound dipped back below $1.36 but is still sitting close to its highest levels since Britain voted to leave the European Union in June previous year. Brent crude, used to price worldwide oils, dropped 37 cents to $55.25 in London.

Other reports by Iphone Fresh

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