Asian Shares Mixed, Sydney Slips on Inflation
Stocks in Australia slumped Wednesday on stronger-than-expected domestic inflation, while Chinese shares continued to rebound following aggressive moves by the country's central bank to head off cash-crunch concerns.
The Australian dollar bumped higher after fourth-quarter consumer prices rose 2.7% from a year earlier, outpacing market forecasts for a 2.5% increase. On quarter, the CPI rose 0.8% compared with a forecast 0.5%.
The Aussie was last trading at US$0.8855 compared with US$0.8808 late Tuesday in New York, as the higher-than-expected inflation damped hopes of further interest-rate cuts. Stocks fell, with the S&P/ASX 200 down 0.8%, the biggest decliner in the region.
Mining stocks weighed on the Australian stock market after the price of spot iron ore fell to a six-month low overnight. Shares in BHP Billiton fell 1.7%, with the fall in iron-ore prices overshadowing the company's production report, which showed the miner produced a record volume of iron ore in the first half of its fiscal year.
Rio Tinto fell 1.7% while Fortescue Metal Group lost 1.8%. Medusa Mining slipped 4.7% after the company said Tuesday that its Philippine operating company Philsaga Mining Corporation had ceased all mining activities as a precautionary measure due to flooding.
Pointing in the other direction, stocks on the Shanghai Composite rose 0.8% as the People's Bank of China response this week to another surge in interbank borrowing costs continued to encourage investors. The central bank offered 180 billion yuan ($29.8 billion) in short-term loans, among other actions, to ease the crunch.
"The PBOC's move was a strong signal to the market not to be overly bearish, though we have to bear in mind its moves [issuing reverse repurchase agreements] are short-term in nature and does not overturn the tight monetary policy environment," said Soochow Securities analyst Deng Wenyuan.
In Japan, the yen was steady ahead of the conclusion of the Bank of Japan's policy meeting. Economists expect the central bank to keep interest rates unchanged, leaving the dollar little moved at Yen104.32 compared with Yen104.29 late Tuesday in New York.
With the local currency steady, the Nikkei slipped 0.1%, pulling back from its 1% gain in the previous session.
Esther Fung contributed to this article
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