Asia-Pacific equities posted strong gains on Monday as investors now turns their focus to the US Federal Reserve’s policy meeting this week.
The Federal Reserve Open Market Committee (FOMC) will be having its two-day meeting on September 19 and 20, at which the bank is widely expected to announce the start of a cutback to its $4.4 trillion balance sheet.
The members are also likely to keep its key benchmark interest rate steady, as investors see that inflationary pressures are not enough to push the bank for another hike in December.
Conversely, economist Tom Porcelli argued the market was underestimating the risk of tightening and said that there will be a hike not only in December, but four more by 2018 as well.
Economist Scott Anderson said that this will be the biggest meeting of the year, as he believes that Fed Chair Janet Yellen’s quarterly press conference would be laying the foundation for prospects of a possible interest hike for the said month, as well as details regarding next year’s outlook.
Ahead of Fed’s meeting, MSCI’s broadest index of Asia-pacific shares outside Japan was up 1 percent to $544.13, while Japanese markets are closed for a public holiday.
Hong Kong’s Hang Seng rose 1.2 percent to HK$28,159, while Shanghai’s Composite increased by 0.2 percent to CN¥3,362.86.
India’s BSE Sensex 30 edged higher by 0.5 percent to ₹32,438.81, while Nifty 50 climbed 0.6 percent to ₹10,151.
South Korean Shares Hit Six-Week High
South Korean stocks closed at a six-week high on Monday, driven by robust gains from tech shares and as tensions ease in North Korea.
By the end of its session, the KOSPI added nearly 1.4 percent to ₩2,418.21, its highest level since August 3.
Tech giant Samsung Electronics mainly led the increases, rising as much as 4.1 percent to ₩2,624,000, amid positive expectations over the growing prices of semiconductors. Major chipmaker SK Hynix also finished with a 3.2 percent boost to ₩79,700.
US President Donald Trump is set to discuss Pyongyang’s nuclear objectives with world leaders at the United Nations on Tuesday.
Australian Shares Recover
Australian stocks recovered from three consecutive losses after finishing higher on Monday, as its financials, consumer discretionary and energy sectors pulled shares higher.
At the close in Sydney, S&P/ASX 200 edged higher by 0.4 percent to A$5,720.60, while the S&P/ASX 200 VIX increased by 0.8 percent to A$12.532.
Shares in the financial sector climbed 0.7 percent to A$6,419.21, while consumer discretionary also rose by 0.7 percent to A$2,143.40, and the energy segment gained 0.5 percent to A$9,172.25.
Philippine Shares Hit All-time High
Philippine equities reached a record high on Monday, led by market’s optimism over the country’s tax reform package, while other markets in the region remained cautious ahead of the Fed meeting.
The country’s PSEi Composite gained almost 1.4 percent, hitting an all-time high of ₱8,294.14.
The tax reform bill, which is set for discussion later this week, is intended to provide revenue for a multi-billion dollar infrastructure program for the government’s economic plan. The bill however, still requires the Senate’s approval.