Asian Stocks Higher Ahead of US Fed Reserve Decisions

Asian stocks rose during the trading session on Wednesday, amid optimism about easing restrictions related to the coronavirus and expectations for strong profits for US technology companies, which helped sentiments ahead of the announcement of the Federal Reserve monetary policy scheduled later today. Japanese markets were closed due to Showa Day holiday. Chinese stocks rose as investors were optimistic about the strong earnings updates from the country's largest listed banks. Accordingly, the benchmark Shanghai Composite Index rose 12.42 points, or 0.44 percent, to 2822.44, while the Hong Kong Hang Seng Index ended its trading session, up 0.28 percent to 2443.59 points.

Australian markets have had a share in this rise as many countries around the world have announced a gradual reopening of companies. The Standard&Poor's/ASX200 index rose 1.51 percent to 5393.40 while the broader All Ordinaries Index closed 1.53 percent higher at 5446.80. The four big banks jumped with gains of 4-6%. Shares of energy companies such as Origin Energy, Oil Search, Woodside Petroleum and Santos rose 5-7 percent as oil prices rebounded during the Asian session in hopes of easing global crude market availability. Shares of gold miners Newcrest and Northern Star Resources fell 1-2 percent after Safe Haven gold prices extended losses for the third consecutive session.

On the economic side. A government report showed that total consumer prices in Australia increased by 0.3 percent, respectively, in the first quarter of 2020. This exceeded expectations by an increase of 0.2 percent and decreased from 0.7 percent in the previous three months. On an annual basis, inflation rose 2.2 percent - again above expectations at 2.0 percent and up from 1.8 percent in the fourth quarter.

Seoul stocks rose for the third straight session after data showed factory production in March rose at the biggest pace in 11 years amid production turmoil related to the Chinese virus. The Kospi rose 13.47 points, or 0.70 percent, to 1947.56. The Korean Statistics Agency said that South Korea's industrial output rose by a seasonally adjusted 4.6 percent on a monthly basis in March, after falling by 3.8 percent in February. On an annual basis, industrial output jumped 7.1 percent after rising 11.3 percent in the previous month.

New Zealand stocks fluctuated before dropping sharply after the government eased the closing rules for Covid-19, which allowed it to reopen construction sites, restaurants and some other companies after the new Covid-19 cases fell. The benchmark NZX-50 index fell 93.37 points, or 0.87 percent, to 10,666.19.

Economically: New Zealand's goods trade surplus reached NZ $ 672 million in March, up from NZ $ 594 million in February, the New Zealand Statistics Authority said today. Exports increased by 3.8 percent annually.

US stocks ended yesterday's trading down as a few US states allowed some companies to reopen after closings to reduce the outbreak of the Coronavirus, and the Trump administration has unveiled a plan to intensify testing. The Dow Jones industrial average fell 0.1 percent, the Standard & Poor's 500 index fell by half a percent, while the Nasdaq Technology Composite Index fell 1.4 percent.

Mahmoud Abdallah
Mahmoud has been working fulltime in the Foreign Exchange markets for 12 years. Offers his analysis, articles and recommendations at the most renewed Arabic websites specialized in the global financial markets, and his experience gained a lot of interest among Arab traders. Works on providing technical analysis, market news, free signals and more with follow up for at least 12 hours a day, and aims to simplify forex trading and the concept of trading for his audience.