Asian shares mostly lower despite US stocks' gains
MANILA, Philippines (AP) Asian shares were mostly lower Thursday despite gains on Wall Street as a weaker dollar negatively impacted Japanese stocks and investors weigh risks amid the Federal Reserve's cautious stance about tightening rates.
KEEPING SCORE: Japan's Nikkei 225 shed 0.9 percent to 16,677.84. Australia's S&P ASX 200 slipped 0.4 percent to 5,348.30. South Korea's KOSPI was 0.2 percent lower at 2,022.17. The Philippines' PSE index was down 0.9 percent at 7,651.78, Singapore's FTSE Strait Times index was up 0.5 percent at 2,878.91. Financial markets were closed for holidays in China, Hong Kong and Taiwan.
ANALYST VIEWPOINT: "The Fed being more cautious about tightening rates should negatively impact stocks, since they are worried about the state of the economy and its ability to withstand higher interest rates," said IG Market Strategist Bernard Aw. "While there is some sort of a macro theme, at least for June, investors are reacting in an incoherent manner in the markets." But Aw added: "Make no mistake, the cautious undertone pervades the financial markets."
WALL STREET GAINS: Stocks rose for the third day in a row Wednesday as machinery and mining companies traded higher. Oil prices also continued their rise, and stocks and oil prices are at their highest in almost a year. Metals prices jumped as the dollar got weaker. Also trading higher were makers of beverages and other consumer goods. That's because a weaker dollar could mean better sales and bigger profits for U.S. companies that do a lot of business overseas. The Dow Jones industrial average rose 66.77 points, or 0.4 percent, to 18,005.05. The Standard & Poor's 500 index gained 6.99 points, or 0.3 percent, to 2,119.12. The Nasdaq composite added 12.89 points, or 0.3 percent, to 4,974.64. The S&P 500 and oil prices are both at their highest levels since July, and the Nasdaq hasn't been this high since Dec. 31.
SOUTH KOREA'S ECONOMY: Bank of Korea lowered its key interest rate to a record low Thursday in a move that took market watchers by surprise. South Korean central bank policymakers lowered the policy rate by a quarter of a percentage point to 1.25 percent for the month of June. The move is the first rate cut in Asia's fourth largest economy since June last year. The bank lowered the key interest rate twice in 2015 to aid the slowing economic recovery. Most market analysts had expected the bank to lower interest rates later in the year as growth was expected to slow during the second half of this year. The South Korean economy shows "no clear trends of improvement in domestic demand," the central bank said in a statement. There are "considerable downside risks surrounding the future growth path, such as corporate restructuring and the slowdown in global trade." South Korea has seen weak exports amid low crude oil prices that hit its shipyards and other key export sectors.
OIL: U.S. crude gained 34 cents at $51.57 a barrel in electronic trading on the New York Mercantile Exchange. It jumped 87 cents on Wednesday to $51.23 a barrel. Brent crude, the benchmark for international oil prices, rose 22 cents to $52.73 a barrel in London. On Wednesday, it went up $1.07 to $52.51.
CURRENCIES: The dollar slid to 106.60 to the yen from 106.94 the previous day. The euro edged up to $1.141 from $1.1397 on Wednesday.