Asian
stocks edged up on Wednesday as nervous investors counted down to
Britain's make-or-break European Union referendum, while Federal Reserve
Chair Janet Yellen's cautious tone on future rate hikes added to a
subdued mood in markets.
MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.2 percent. Japan's Nikkei extended losses to shed 1 percent.
China's CSI 300 index and the Shanghai Composite both advanced about 0.3 percent, while Hong Kong's Hang Seng slipped 0.1 percent.
In the U.S. the market also edged up with the S&P 500 still below its 11-month high after rising 0.27% hit in early June.The Yellen-led Fed is still searching for better job numbers and any whiff of inflation. Hedge fund managers aren't the only ones who hedge. As one Street wag put it, a while back she was "cautiously optimistic, now she's just cautious looking for some optimism."
As the days dwindle down, to quote an old song, to a precious few, it remains to be seen if Yellen will find the courage to pull the trigger on rate hikes even before the start of next year. The UK vote Thursday should it come out leave will solidify that. Her philosophy appears to be wait and see until all the facts are known that way if anything goes wrong it wasn't her fault.
From CNBC we get this report:
Asia markets traded mixed on Wednesday, after U.S. stocks eked out gains Tuesday amid a drop in oil prices, and as investors counted down to the upcoming British vote to decide whether to remain in the European Union. Australia's ASX 200 was up 0.2 percent in morning trade, with the energy and financials sub-index leading gains. In Japan, the benchmark Nikkei 225 was down 0.93 percent, while across the Korean Strait, the Kospi was up 0.46 percent.
In Hong Kong, the Hang Seng index was down 0.4 percent. Chinese mainland markets traded flat, with the Shanghai composite at 2,879.28 and the Shenzhen composite at 1,890.61.
Oil prices closed down overnight, likely due to profit taking following a two-day rally. Global benchmark Brent was down 3 cents at $50.62 a barrel, while the July front-month U.S. crude futures ended down 1 percent at $48.85 before expiring.
During Asian hours Wednesday, Brent traded up 0.1 percent at $50.67 a barrel, while the new August front-month U.S. crude futures contract traded up 0.3 percent at $50 a barrel.
Yellen's more circumspect view on the future path of U.S. rates comes as many investors remain on the sidelines ahead of Thursday's British referendum on its European Union membership.
Polls
in recent days showing rising momentum for the "Remain" camp helped
boost risk appetite in global markets and have weighed on safe-haven
assets such as German bonds and the Japanese yen since Friday.
But
many investors are shunning trading as the vote remains too close to
call, with an opinion poll published on Tuesday showing the "Remain"
campaign's lead had shrunk.
"We
still have three polls on the U.K. referendum before the vote, and
another shift back to Brexit will see risk appetite disappear in a
jiffy," Bernard Aw, market strategist at IG in Singapore, wrote in a
note. The British pound edged back to $1.4678 after climbing to as high as $1.4788 on Tuesday, its loftiest level since January 4.
For the latest Reuters news on the referendum including full multimedia coverage, click
The euro also slid to $1.12585 from this week's high of $1.1383 hit on Monday, turning negative on the week.
European Central Bank President Mario Draghi said on Tuesday that Britain's referendum was adding uncertainty to markets, and that the ECB was ready to act with all instruments if necessary.The yen gained 0.3 percent to 104.45 yen to the dollar following a dip on Tuesday, but remained not far from its 22-month high of 103.555 hit last week. The ebbing risk appetite didn't help gold, though. Spot gold held steady at $1,268.77 an ounce, after touching a 1 1/2 week low of $1,264.10 on Tuesday.
On the other hand, oil prices extended their recovery after news of a larger-than-expected draw in U.S. crude stockpiles. Crude inventories fell by 5.2 million barrels for the week ended June 17, the American Petroleum Institute (API) said. The trade group's figures were triple the draw of 1.7 million barrels forecast by analysts in a Reuters poll. <API/S>
Brent crude futures advanced 0.3 percent to $50.77 per barrel, after rising high as $51.10 on Tuesday, its highest level since June 10. U.S. crude futures' new benchmark August contract rose 0.4 percent to $50.05.
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