By Daniel Inman
Asian market were mostly lower Thursday after the Federal
Reserve left monetary policy unchanged, while China was weighed
down by declines in banking stocks.
The Fed met expectations by leaving its stimulus program
unchanged at its policy meeting, though it did surprise with its
upbeat assessment of the economy. Some investors were looking for
the central bank to downgrade its economic outlook after the
government shutdown and budget impasse earlier this month.
In fact, the government shutdown was a major focus for global
markets in the first half of October. Asian stocks proved resilient
through the drama, and most markets in the region look set to post
respectable gains for the month.
The Philippines' PSE Composite and Indonesia's JSX were up 6.5%
and 4.6%, respectively, month to date, while Australia recorded a
4.3% gain. China has been a laggard in October, as a rise in local
interbank lending rates resulted in the Shanghai Composite giving
back some of its gains from earlier in the month and was last down
1.3% so far in October.
With no positive catalysts from the Fed overnight, most regional
markets dropped Thursday.
The Nikkei Average fell 0.1%, as the yen (USDJPY) was steady in
Asia, recently at Yen98.47 to the dollar.
Australia's S&P/ASX 200 rose 0.6%, and South Korea's Kospi
dropped 0.6%.
In China, Hong Kong's Hang Seng Index fell 0.4%, and the
Shanghai Composite lost 0.7% on the mainland.
The regional earnings season progressed, with markets reacting
to results in Australia, Japan and China.
Lenders in China were in focus after several of the country's
largest banks reported their third-quarter earnings, with profit
growth continuing to decline as the sector faced a maturing economy
and interest-rate pressure.
Bank stocks fell in Hong Kong after a sharp increase during the
previous session. Bank of Communications (601328.SH) dropped 1.9%,
while Agricultural Bank of China (ACGBF) managed a 0.3% gain.
China Minsheng Banking Corp. (CMAKY), a stock that came under
pressure during China's liquidity crisis in the summer, fell 2.4%
in Hong Kong. The country's eighth-largest lender reported its
interest income rose by just 3%.
Chinese brokerages posted strong profit growth for the nine
months that ended in September, as the industry benefited from
increased trading volumes and higher investment returns. The market
didn't welcome the news: Citic Securities was down 1.7% in
Shanghai, and Haitong Securities was 1% lower.
National Australia Bank (NAUBF) fell 1.8% in Sydney after the
lender posted full-year earnings in line with market forecasts,
though costs were ahead of expectations.
In Tokyo, ANA Holdings (ALNPF) declined 4.7% after the airline
lowered its 2013 fiscal-year net profit forecast by 65% on higher
fuel costs and slow service expansion because of delays in Boeing
(BA) 787 Dreamliner deliveries.
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