SINGAPORE (BLOOMBERG) - Asian stocks rose on Wednesday (Sept 16) following a rally on Wall Street as investors sifted through the latest data on the world's biggest economy before the Federal Reserve's decision on interest rates.
The MSCI Asia Pacific Index climbed 0.6 per cent to 127.35 as of 9:01 am in Tokyo, with consumer and material shares leading gains. The Standard & Poor's 500 Index advanced 1.3 per cent on Tuesday as a report showed retail sales climbed for a second straight month, a sign shoppers may be looking past recent volatility in financial markets. The Fed is about to decide whether the economy can withstand higher borrowing costs, with odds on a rate hike on Thursday holding at 28 per cent. That's down from more than 50 per cent before China roiled global markets by devaluing the yuan.
"Uncertainty will continue until we get the news from the Fed," James Lindsay, who helps manage the equivalent of about US$3 billion in assets at Nikko Asset Management NZ Ltd. in Auckland, said by phone. "The market is finely balanced on whether the Fed will move or not. There's been uncertainties about China and global growth, but the US economy looks strong enough to be able to withstand an increase in rates."
Japan's Topix index rose 1 per cent. South Korea's Kospi index increased 0.6 per cent. Australia's S&P/ASX 200 Index added 0.5 per cent. New Zealand's NZX 50 Index gained 0.3 per cent. Markets in China and Hong Kong have yet to start trading.
The Shanghai Composite Index sank 3.5 per cent on Tuesday, bringing its two-day loss to 6.1 per cent, amid concern government measures to support the world's second-largest equity market and economy are failing.
E-mini futures on the Standard & Poor's 500 Index slipped 0.1 per cent on Wednesday.