Asian stocks down; Fed speakers and tax reform in focus

Asian stock indexes closed mostly lower on Thursday amid lack of new drivers and as market participants digested a widely anticipated Federal Reserve meeting.

Australia ASX -3.30 -0.05% 6,002.20 CLOSED

Shanghai Comp -12.60 -0.37% 3,383.31 CLOSED

Hang Seng Index -16.89 -0.06% 28,577.17 OPEN

Nikkei 225 +119.04 +0.53% 22,539.12 CLOSED

TSEC 50 Index -17.85 -0.17% 10,788.51 CLOSED

No relevant economic data was released in Asia. Attention is currently directed to Europe and the United States, where data and monetary policy set the tone for world markets.

On the corporate front, shares of National Australia Bank dropped nearly 3 percent after it said its full-year profit to September 30 was A$U6.64 billion or $5.09 billion.

In other news, Honda revised upward its full-year operating profit for the year ending March to 745 billion yen or $6.53 billion from an initial estimation of 725 billion yen.

The Federal Reserve left its reference interest rate unchanged on Wednesday in a range between 1.00 and 1.25 percent, but pointed out the normalization process will continue to develop in the upcoming months as market labor conditions and inflation evolve.

The Dow Jones Industrial Average ended in green territory at 23,435.01 and the S&P 500 added 0.16 percent. The Nasdaq Composite notched down 0.17 percent to 6716.53.

Ahead in today’s session, attention will be directed to initial jobless claims at 12:30 GMT, with an estimated build of 2,000 to 235,000. At the same time, markets will receive third-quarter nonfarm productivity and unit labor costs, seen at 2.4 percent and 0.5 percent respectively.

Traders will also monitor a batch of FOMC speakers, including Governor Jerome Powell, currently the main candidate to replace Janet Yellen as Chair of the Federal Reserve, at 12:30 GMT. Other FOMC members like Dudley and Bostic are set for 16:20 GMT and 22:15 GMT.

House Republicans are expected to unveil a long-awaited tax reform bill on Thursday. The reform will likely boost consumption and inflation, pushing the regulator to adjust rates faster.

President Donald Trump will be announcing its choice for Federal Reserve Chair later in the day, with all analysts pointing at Powell, seen as less hawkish than Yellen.

In Europe, investors will keep an eye on the Bank of England’s monetary policy meeting at 12:00 GMT and Governor Mark Carney’s remarks half an hour later.

Fort Financial Services