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Hang Seng Index, Nikkei 225 inch lower ahead of Fed meeting

Hong Kong’s stock-market benchmark barely moved at Tuesday’s close, while the blue-chip index for Japan posted mild losses.

  • Hang Seng Index in Hong Kong ticked down by 0.04% on Tuesday
  • Meituan (HK: 3690) share price rises 2.6%, making it one of HSI’s top gainers
  • Japan’s Nikkei 225 index dropped 0.5% to close at 28,991.89
  • Electric parts maker Nitto Denko Corp (TYO: 6988) sinks to 9,060 yen per share
  • Buy and sell the Hang Seng Index and Nikkei 225 with an IG account

Hang Seng Index: What’s the latest?

On Tuesday, Hong Kong’s bellwether Hang Seng Index (HSI) finished mildly lower at 28,941.54, down 11.29 points or 0.04% day-on-day.

Among the best-performing blue chips was food-delivery giant Meituan, which jumped 2.6% to HK$313. That was despite mainland China regulators investigating Meituan’s suspected monopolistic practices.

In contrast, the HSI stock with the deepest losses was pharmaceutical company WuXi Biologics (Cayman), which skidded 6% to HK$107.90. Its substantial shareholder had placed 108 million existing shares at HK$107 apiece, representing a 6.8% discount to Monday’s closing price.

HSI’s sub-index that tracks energy shares slipped 0.4%, the IT sector gained some 0.4%, the financial sector moved up by around 0.2%, while property stocks fell 0.3% at Tuesday’s close.

Traders were keeping a close eye on the US Federal Reserve’s comments at its next policy meeting on Wednesday. Of interest to them would be any insight into the Fed’s stance on inflation, bond purchases and risks to the financial system posed by soaring asset prices, Reuters reported.

Lorraine Tan, a director of equity research at Morningstar, told Bloomberg TV that there has been ‘a lot of concern’ about rising interest rates and inflation, ‘but at the end of the day it’s still what happens with the pandemic that matters’.

Tan added that most central banks are still likely to be ‘fairly cautious’ about tightening policy.

Japanese shares sag as earnings disappoint investors

In Tokyo, the benchmark Nikkei 225 index ended Tuesday at 28,991.89, down 134.34 points or 0.5% from the previous day.

The market did not react to the Bank of Japan’s widely anticipated decision of keeping policy unchanged, AFP said.

Japan equities in general underperformed as pandemic-related curbs weighed on market sentiment, while a slew of corporate earnings also failed to meet investors’ high expectations for strong profit recovery, Bloomberg and AFP separately reported.

Nikkei index constituents that declined the most included electric parts manufacturer Nitto Denko, which sank 3.7% to 9,060 yen. Drugmaker Dai-ichi Sankyo lost 3.5% after its lower-than-expected forecast for the current fiscal year.

However, some companies which reported strong earnings did not see their shares rise either. Camera maker Canon failed to sustain its earlier gains, sliding 1.3% even though its annual operating profit forecast exceeded market consensus, AFP pointed out.

‘That means investors’ expectations for corporate outlook are too high,’ said Pictet Asset Management strategist Takatoshi Itoshima.

Mizuho analyst Yutaka Miura said overseas investors sold Japanese shares because the nation’s vaccination rate has been lagging behind those of US and European countries, and new cases were still increasing.

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