Investors in APAC turn cautious ahead of Fed Chair's speech
Updated
Japan’s Nikkei 225 index fell on Friday, after two days of subdued moves, as caution prevailed among investors ahead of the outcome of the US Federal Reserve’s Jackson Hole Conference.
Investor focus will be on Fed Chair Jerome Powell, who is set to make his speech on the US economy and give his views on tapering outlook later during the day.
“The tone of Fed speakers so far around this year’s Jackson Hole is undeniably hawkish. Ever since the nearly one million job growth figure in July, there has been very little doubt that officials are pencilling the start of tapering for this year,” ING said in a note.
Nikkei 225 index posts weekly gains
On Friday, Japan’s benchmark Nikkei 225 index fell 0.4% to 27,641.14 points as utilities and energy stocks led losses. However, the benchmark index gained 2.3% higher.
Index heavyweights Uniqlo-owner Fast Retailing, global investment fund SoftBank, automaker Toyota and electronics manufacturer Sony Group all ended the day in the red.
For the week, the Topix-17 Automobile & Transport Equipment subindex rose 2.7% and the Topix-17 Steel & Nonferrous Metals subindex jumped 5.1%.
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KOSPI sees best week since March
Elsewhere, South Korea’s KOSPI index saw its best week since late March. The KOSPI index closed 0.2% higher on Friday, a day after the Bank of Korea (BOK) became the first major Asian central bank to raise interest rates.
“Overall, we maintain our long-term policy view that the BOK will deliver two more hikes by end-2022, raising its policy rate to 1.25%,” Nomura said in a note. “A second hike in November after the release of Q3 (third quarter) GDP (gross domestic product) data in late October, and a final hike in H2 (second half) 2022.”
South Korean technology stocks were weak on Friday with Samsung Electronics and SK hynix losing 0.4% and 0.5%, respectively.
Tech stocks drag HK to close flat
Hong Kong’s Hang Seng index gave away early gains to close flat on Friday. Internet stocks including Tencent Holdings and Alibaba Group lost steam after lunch to close 1.1% and 3.9% lower respectively on Friday. The benchmark logged its best week in over a month by gaining 2.3%.
Shares of automobile stocks gained in Hong Kong as well as Mainland China on Friday. Great Wall Motor emerged as one of the biggest percentage gainers on China’s blue-chip CSI 300 index, while Geely Automobile and BYD gained over 2% in Hong Kong.
The Shanghai Composite index saw a weekly gain of 2.8% buoyed by a USD7.7bn capital injection into China’s banking system by the central bank earlier this week.
Aussie shares muted
Meanwhile, Australian shares closed flat on Friday as gains in financials and energy sectors were offset by losses in technology and mining stocks.
Lynas Rare Earths, the biggest rare earths miner outside China, lost 3.6% on Friday despite reporting record full-year profit.
Retail firm Wesfarmers slipped 2.8% after the company flagged uncertain market conditions for full-year 2022. On Friday, data also showed that retail sales in Australia fell in July due to COVID-19 restrictions.
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