Thursday, 20 March 2014 00:00
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Reuters: Asian share markets slipped on Wednesday, with investors still observing the Ukraine/Crimea crisis and ahead of a closely-watched Federal Reserve policy review later in the session.
MSCI’s broadest index of Asia-Pacific shares outside Japan lost 0.2%, with relief over a perceived ebb in Ukrainian tensions replaced by caution over the Fed’s policy review. Tokyo’s Nikkei stock average fell 0.4%.
Global markets have been buffeted in recent weeks by the crisis in Ukraine, slowing growth in China and a mixed economic picture in the United States renewing speculation about the pace of the Fed’s stimulus tapering.
That said, business sentiment among Asia’s top companies edged up in the first quarter, as solid improvement in the Philippines and South Korea outweighed weakness in China, India and Australia amid persistent concerns over the global economy, a ThomsonReuters/INSEAD survey showed.
The ThomsonReuters/INSEAD Asia Business Sentiment Index RACSI snapped two consecutive quarterly declines and rose to 64 in the first quarter of this year from 62 in the fourth quarter of 2013. A reading above 50 indicates an overall positive outlook.
The Fed is widely expected to continue to reduce the size of its monthly bond purchase program by $10 billion each meeting, but also to alter its forward guidance when it delivers the policy statement on Wednesday, the first policy review to be presided over by new Fed Chair Janet Yellen.
“What will also get a lot of attention is the winter that the United States has just suffered. Some commentators are looking for evidence of recognition from the FOMC that the winter has altered their guidance on the economic recovery – as tapering has been explicitly based on data,” Evan Lucas, market strategist at IG in Melbourne, said in a note to clients.
“However, we believe the winter is unlikely to sway its thinking and the current timeline for the unwind of monetary stimulus will remain,” he said.
