Seoul, South Korea (BBN) – Asian markets were mixed on Monday, as traders eyed a potential rate hike by the Federal Reserve this week.
South Korea’s Kospi was buoyant, up 0.91 per cent, 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.
Down Under, the ASX 200 fell 0.39 per cent as losses of more than 1 percent in its energy sub-index weighed.
But the Australian Stock Exchange’s gold sub-index was strongly higher by 4.54 per cent, as interest in the safe-haven asset rose ahead of the Federal Reserve’s March meeting.
Japan’s Nikkei 225 recovered from earlier losses to trade up 0.15 per cent 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 percent 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 were under pressure early on Monday. The Shanghai composite dipped 0.43 per cent while the Shenzhen composite fell 0.49 per cent.
Hong Kong’s Hang Seng index was up 0.15 per cent.
The Hong Kong-listed shares of HSBC were up 0.79 per cent on Monday after news that AIA Group Chief Executive Mark Tucker was appointed as the HSBC chairman, replacing Douglas Flint.
“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 per cent, according to CME Group’s FedWatch tool at 7 a.m. 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 up 0.1 per cent at 101.3 against a basket of currencies early Asian time on Monday.
Against the greenback, the yen was fetching 114.83, while the Australian dollar was at $0.7540.
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