Seoul, South Korea (BBN) – Asian markets turned positive on Monday but traders remained wary ahead of a potential rate hike by the Federal Reserve this week.
South Korea’s Kospi finished up 0.97 per cent or 20.2 points at 2,117.59, as investors shrugged off the political risks after President Park Geun-hye was removed from office last Friday, reports CNBC.
Park left the presidential Blue House on Sunday, two days after the Constitutional Court’s decision to uphold her impeachment by the National Assembly over a corruption scandal, which also involves Samsung’s de facto chief Jay Y. Lee.
“(The South Korean ruling) implies that the Korean society chose reform and justice over concerns on near-term economics and stability,” said CW Chung, managing director at Nomura Securities, in a Monday note.
“From now on, the issue is whether such political changes can lead to improvements in commercial laws and renovation in old-fashioned practices and eventually the re-rating of the Korean stock market,” Chung added.
Japan’s Nikkei 225 recovered from earlier losses to close up 0.15 per cent or 29.1 points at 19,633.75 as the yen continued to slip against the dollar.
A weakened yen is generally seen as a positive for Japan Inc. as it makes exports cheaper and increases overseas earnings when converted back to local currency.
Earlier, official data showed that Japan’s core machinery orders fell 3.2 per cent in January from the previous month, missing Reuters estimates of a 0.5 per cent increase.
Core machinery orders are regarded as a leading indicator of capital spending in the coming six to nine months.
Japanese Prime Minister Shinzo Abe’s support rate slipped six points to just under 56 per cent, according to a opinion poll on Sunday, after weeks of questions in parliament about a land deal by a school operator with whom his wife had links.
Mainland Chinese shares finished in positive territory. Shanghai composite closed up 0.76 per cent or 24.3 points at 3,237.02 while the Shenzhen composite ended 0.8 per cent, or 16.3 points, higher at 2,029.89.
Hong Kong’s Hang Seng index was buoyant, up 1.25 per cent by 3:10 pm HK/SIN.
The Hong Kong-listed shares of HSBC gained 2.46 per cent on Monday after news that AIA Group Chief Executive Mark Tucker was appointed as the HSBC chairman, replacing Douglas Flint.
But Down Under, the ASX 200 fell 0.32 per cent or 18.3 points at 5,757.35 as heavy losses in its energy sub-index weighed.
As interest in the bullion, regarded as a safe-haven asset, rose ahead of the Fed’s meeting, the Australian Stock Exchange’s gold sub-index was strongly higher by 5.35 per cent.
Major Australian gold miners all outperformed the overall index. Newcrest Mining added 4.63 per cent, Evolution Mining gained 6.81 per cent and Alacer Gold was up 4.82 per cent.
“The key to market performance this week is the response to the US lift in rates. Such a well-flagged and expected move is unlikely to disrupt the current optimism, even if the Fed takes the opportunity to re-iterate a steeper tightening path,” Michael McCarthy, chief market strategist at CMC Markets, said in a Monday note.
The Fed is scheduled to meet from March 14-15, with most market participants expecting the central bank to raise interest rates. Market expectations for a March rate hike stood at 88.6 percent, according to CME Group’s FedWatch tool at 12:25pm HK/SIN on Monday.
Stateside, all three major US markets closed higher after nonfarm payrolls rose by 235,000 in February, topping median expectations.
The US unemployment rate also ticked down to 4.7 per cent.
The Dow Jones industrial average finished up 0.21 per cent to 20,902.98, the S&P 500 ended higher by 0.33 per cent to 2,372.6 and the Nasdaq composite rose 0.39 per cent to 5,861.73.
The dollar was trading at 101.05 against a basket of currencies on Monday, down for the fourth consecutive session.
Against the greenback, the yen was fetching 114.58 by 3:13 pm HK/SIN while the Australian dollar was at $0.7581.
On the energy front, oil prices extended declines during Asian trade on Monday, with US crude down 0.66 per cent to $48.17 a barrel, while Brent crude was off 0.49 per cent to $51.12.
Oil prices had started to slide earlier last week, after data showed big increases in US crude inventories, which offset the efforts made by the Organization of Petroleum Exporting Countries’ output curbs.
BBN/SK/AD