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Market Update

Asian Stocks Diverge; Eyes on Fed

Asian indexes swayed along the flatline Thursday with worries about the timing and quantum of U.S. Federal Reserve's taper plan undermining sentiment.

At the time of writing, Tokyo's Nikkei lost 0.1% and Mumbai's Sensex erased 0.3% while mainland China's Shanghai Composite edged up 0.1%.

Hong Kong's Hang Seng and Australia's S&P/ASX All Ordinaries added 0.2% each at 9:38 a.m. Indian Standard Time.

Investors seemed to have paused for breath after sharp gains seen in recent sessions as they await the U.S. central bank's monetary policy meeting next week.

Most analysts believe the Fed would announce some sort of a rollout of its monthly bond-purchase program this meeting; although the quantum of the reduction is expected to be much lesser than earlier planned following last Friday's dismal U.S. jobs data.

Back in Asia, some economic reports were in the headlines. Data released in Japan showed core machinery orders remained flat in July from the previous month, which means businesses are still cautious about increasing investments despite a weaker yen and monetary stimuli by the Japanese government.

Meanwhile, Japan's prime minister reportedly said the government would go ahead with a sales tax hike next April and would implement a 5-trillion-yen-package of measures to counter its impact on the economy.

In Australia, unemployment increased to a seasonally adjusted 5.8% in August, from 5.7% in July, official statistics revealed.

Stocks on the Move

In Tokyo, stocks edged lower as the dollar weakened amid taper talks. A stronger yen diminishes the earnings outlook of export-oriented firms, and weighs on shares of these companies.

Toyota Motor Corp., Sony Corp. and Toshiba Corp. all lost around 1% each.

Sharp Corp. plunged nearly 6% amid concerns about its fund-raising plan. The struggling electronics-maker intends to raise up to 170 billion yen through a public share offering and a third-party allotment.

Mitsubishi Motors Corp. dropped 6.7% after the Nikkei daily reported the automaker was planning a 200 billion yen share offering, triggering dilution concerns.

In Hong Kong, property developers were in the green after yesterday's decline. Poly Property Group and China Overseas Land & Investment enhanced around 1.5% each while Sun Hung Kai Properties gained over a percent.

But real-estate stocks on the mainland bourses lagged behind. Shanghai-listed Gemdale Corp. lost more than 2% while the broader Shenzhen-listed China Vanke gave up 1.7%.

Back in Hong Kong, metal players continued to shine, with financials and some exporters lending additional support. Jiangxi Copper climbed 1.8%, global banking giant HSBC Holdings moved up 0.4% while fashion retailer Esprit Holdings improved 1.7%.

In Sydney, banks and miners were trading mixed amid cautious moves. Index-leader BHP Billiton added 0.7% while close rival Rio Tinto inched up 0.3%. But Fortescue Metals Group fell 2.4%.

Among banks, NAB was little-changed while Westpac Banking Group and ANZ lost 0.3% and 1.1% respectively.

In corporate news, chief executive officer of Qantas Airways Ltd. said the airline was mulling the possibility of relocating its Jetstar business to the current international terminal one at Sydney Airport. Shares of the national carrier were up 2.4% on heels of the news.

On the earnings front, Sigma Pharmaceutical Ltd. gained 1.6% despite posting a 38% drop in half-yearly profits.

Retailer Myer Holdings fell 3.1% after the company's full-year profit declined a more than expected 9%.

In Mumbai, markets opened on a positive note but soon lost momentum amid mixed global cues and as investors booked profits.

Banks, auto firms, IT stocks and some defensives were among the top losers.

Sesa Goa (-2.3%), Hero MotoCorp. (-2.1%), ICICI Bank (-1.7%), Hindustan Unilever (-1.7%) and TCS (-1.4%) were among the top decliners on the 30-share benchmark index.