Abu Dhabi - Arabstoday
Asian stocks stalled Thursday as profit taking overtook earlier gains powered by the Nasdaq’s biggest jump this year and the U.S. Federal Reserve’s prediction of modest growth for the world’s No. 1 economy. Japan’s Nikkei 225 index gave up morning gains to fall 0.2 percent to 9,541.55 as traders turned cautious ahead of the Bank of Japan’s policy-setting meeting Friday. South Korea’s Kospi also reversed course, slipping 0.2 percent to 1,959.20. Benchmarks in Singapore, Taiwan and mainland China also fell. But Hong Kong’s Hang Seng posted a 0.4 percent gain to 20,729.36. Some analysts attributed the bumpy trading to relief over the Fed’s assessment of the U.S. economy, followed by a wave of profit-taking. “We saw Asian markets fly out of the gates before pulling back on some profit taking following the recent run,” said Stan Shamu of IG Markets in Melbourne. U.S. financial markets barely budged after the Federal Reserve, following a two-day policy meeting, said Wednesday it would stick with its plan to keep its key short-term interest rate near zero. The Fed’s assessment that U.S. economic growth would pick up gradually remained only a marginal source of comfort for investors — especially in Asia, which relies on the U.S. as a crucial market for its exports of cars, electronics, textiles and other goods. Analysts at Credit Agricole CIB in Hong Kong said in an e-mail that they remain skeptical “about the ability of risk assets (such as stocks) to continue rallying but acknowledge that at least in the near term the Fed has put a floor under such assets.” The Fed detailed no plans to extend its bond-buying program when the current iteration ends in June, although Fed chairman Ben Bernanke made clear that if the economy slows, the Fed could take further steps to boost growth. Elsewhere in Asia, the Australian stock exchange was higher after a public holiday Wednesday. The S&P/ASX 200 rose 0.2 percent to 4,370.80. Among individual stocks, Hong Kong-listed China Everbright International Ltd. soared 7 percent, following the resignation of vice chairman and executive director Li Xueming. Li is the older brother of Bo Xilai, a powerful Chinese politician felled by a messy scandal involving the high-profile murder of a British businessman. South Korea’s Dongyang Engineering & Construction Corp., jumped 15 percent after announcing projects to build two wind farms in the country’s south, Yonhap News Agency reported. The Nasdaq composite index shot 2.3 percent higher to 3,029.63 Wednesday, powered by Apple shares. The iPhone maker’s stock climbed $50 after the company again blew past Wall Street’s profit forecasts. With Apple’s help, the technology-focused Nasdaq posted its best day this year. The Dow Jones industrial average closed up 0.7 percent to 13,090.72. The S&P 500 rose 1.4 percent to 1,390.69. Benchmark oil for June delivery was up 2 cents to $104.14 per barrel in electronic trading on the New York Mercantile Exchange. The contract added 57 cents to end at $104.12 per barrel in New York on Wednesday. In currencies, the dollar fell to 81.16 yen from 81.29 yen amid the Fed’s tepid assessment of the U.S. economy. The euro fell to $1.3221 from $1.3230.