By Daniel Inman
Southeast Asian markets notched up healthy returns for a week that was dominated by developments suggesting that U.S. monetary policy could remain easier than previously expected.
On Monday, stocks rose on news that Lawrence Summers withdrew from the race to become the next chairman of the Federal Reserve -- a candidate expected to roll back the central bank's stimulus soon after taking the post.
Markets on Thursday received another boost from the Fed's surprise decision to keep its monetary policy steady, going against widespread expectations for the bank to start reducing its bond-buying program.
As a result, Southeast Asian markets that had been beaten down over the summer made substantial gains. The fear of a removal of U.S. stimulus efforts, which had supported these small markets in recent years, prompted investors to pull their money out of countries like Indonesia and the Philippines.
The gains this week helped the recovery of these markets: Indonesia's JSX was 6.5% higher since last Friday and Thailand's SET jumped 5.7% over the same period.
On Friday, Asian stocks took a pause after the previous session's strong gains: Australia's S&P/ASX 200 fell 0.4%, Indonesia's JSX fell 1% and the Philippines PSE Composite dropped 0.5%.
"Today looks like being one of those Fridays where markets take stock after a big news week," said Ric Spooner, chief market analyst at CMC Markets. "We may see some profit-taking by short term sellers disappointed that yesterday's strong upward momentum was not followed through," Spooner added.
Japan's Nikkei fell 0.2% as the U.S. dollar weakened slightly in Asia after it strengthened against the yen (USDJPY) Thursday. The greenback was at Yen99.25 Friday, after a 1.6% gain in the previous session.
In Tokyo, real estate firm Mitsubishi Estate Co. (MITEF) rose 1% after the average land price in greater Tokyo, Osaka and Nagoya rose 0.1% on year as of July 1, the first on-year rise in five years.
Also in Tokyo, retailer Aeon Co. (AONNF) dropped 0.5% after a Nikkei report said that the company's consolidated operating profit for the six months ending Aug. 31 will likely fall short of market consensus.
Much of North Asia was closed for public holidays Friday, with mainland China, Hong Kong and South Korea shut. Markets in Shanghai and Seoul were closed on Thursday as well, which means that they haven't had a chance to react to the Fed's latest policy decision.
When these markets reopen Monday, there will also be a data point on the Chinese economy in the form of preliminary manufacturing data for September -- a number that has impacted markets in recent months.
-Daniel Inman; 415-439-6400; AskNewswires@dowjones.com
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(END) Dow Jones Newswires
09-20-13 0106ETCopyright (c) 2013 Dow Jones & Company, Inc.
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