Asian markets take breather after Fed-fuelled rally, STI down 1%

A cyclist goes past a quotation board flashing share prices of the Tokyo Stock Exchange in Tokyo, on March 22, 2016.
A cyclist goes past a quotation board flashing share prices of the Tokyo Stock Exchange in Tokyo, on March 22, 2016. PHOTO: AFP

HONG KONG (AFP) - Stock markets in Asia drifted in and out of positive territory on Thursday morning (March 31) as the upbeat sentiment fuelled by the prospect of lower US borrowing costs was offset by profit-taking after the recent gains.

While Wall Street provided a strong lead with another healthy advance on all three main indexes, traders in Asia moved cautiously ahead of the release of key data Friday out of China and the United States.

Tokyo ended the morning up 0.1 per cent, Hong Kong was 0.3 per cent lower, Shanghai added 0.1 per cent and Sydney was 1.3 per cent higher.

Singapore's Straits Times Index was down 1.04 per cent at 2,842.86 as of 11:37am.

World markets soared on Wednesday after Federal Reserve chief Janet Yellen said the bank was unlikely to raise interest rates in the first half of this year citing ongoing concerns about the slow global economy and its impact on the US.

The gains provided a late boost to the end of a strong month across most asset classes, which had been hammered in January and February by China's economic woes and plunging oil prices, among other things.

"A lot of the recent rebound has been down to the Fed back-tracking on rate hikes," Mark Lister, head of private wealth research at Craigs Investment Partners in Wellington, told Bloomberg News.

"We've seen a big rally but there are still some genuine worries out there. Markets had been overpricing some of the risks, whereas now they're probably underpricing them."

Investors will now be watching China, where data on March manufacturing activity is released on Friday, providing the latest snapshot of the mainland economy. That is followed by official US jobs figures later in the day.

In Hong Kong, Chinese firm Dalian Wanda Commercial Properties soared 20 per cent after its parent firm said it was considering buying all its shares back - just 16 months after listing.

Billionaire Wang Jianlin, who owns parent Dalian Wanda Group, is looking to buy the firm back for HK$48 a share - the price it listed at but a 24 per cent premium to its Wednesday close.

Analysts say he has likely become disillusioned with its performance.

The firm's stock has tumbled since listing as China's property market has been hammered by a slowdown in the world's number two economy.

In currency trade, the dollar retreated against most emerging units as the prospect of low US interest rates boosts demand for higher-yielding assets.

The South Korean won added 0.6 per cent and the Malaysian ringgit gained 0.5 per cent while the Taiwan and Singapore dollars were also up.