Asian stocks mostly higher ahead of Fed statement
SEOUL, South Korea (AP) - Asian stocks were mixed on Wednesday ahead of the Federal Reserve's policy statement, as strong U.S. economic data raised questions over the likely course for interest rates.
KEEPING SCORE: Japan's Nikkei 225 rose 2.0 percent to 16,702.55 and Australia's S&P/ASX200 added 0.1 percent to 5,543.00. But Hong Kong's Hang Seng index gave up early gains, falling 0.2 percent to 22,090.27 and South Korea's Kospi fell 0.2 percent to 2,023.09. Stocks in mainland China and Singapore fell but shares in Taiwan and Indonesia were stronger.
U.S. RECOVERY: U.S. new home sales data in June exceeded expectations. Americans bought new homes last month at the fastest pace in more than eight years, according to the Commerce Department. Home prices continued their steady upward march in May, thanks to rising sales and a dwindling supply of available houses. Analysts said data continued to auger a broad recovery.
FED WATCH: The Federal Open Market Committee is scheduled to release its latest monetary policy statement later on Wednesday after wrapping up a two-day meeting. While analysts expect the Federal Reserve not to change policy this month, they said recent strength in U.S. economic data and the recovery of investor sentiment since Britain's referendum to leave the European Union have revived the possibility of a rate hike later this year.
ANALYST'S TAKE: "The Fed will in most likelihood opt for a cautious stance while assessing Brexit implications on the U.S. economy," Mizuho Bank wrote in a daily commentary. "We caution that there is a risk that markets may be caught wrong-footed in the event of a surprise downbeat tone."
ANOTHER TAKE: With a majority of analysts betting on one rate hike in December and two hikes next year, "the Feds are unlikely to rock the boat," said Stephen Innes, senior trader at OANDA. "However, this week's FOMC meeting is facing heightened importance due to the uptick in U.S. economic data."
WALL STREET: U.S. stock markets finished mixed. The Dow closed down 19.31 points, or 0.1 percent, to 18,473.75, weighed down by a drop in shares in McDonald's. The Standard & Poor's 500 was flat and the Nasdaq composite rose 12.42 points, or 0.2 percent, to 5,110.05.
OIL: Benchmark U.S. crude dropped 11 cents to $42.81 per barrel on the New York Mercantile Exchange. The contract closed down 21 cents at $42.92 a barrel on Tuesday. Brent crude, used to price international oils, fell 13 cents to $44.74 a barrel in London.
CURRENCIES: The dollar gained to 105.89 yen from 104.85 yen while the euro strengthened to $1.0998 from $1.0986.