Asia markets fall after Wall Street losses, Singapore shares open 0.08% lower

Asia markets fall after Wall Street losses, Singapore shares open 0.08% lower

Markets in Asia lost ground, following a lower finish on Wall Street after the Federal Reserve kept its monetary policy unchanged, but appeared to signal expectations of weaker US growth.

The Straits Times reported that Singapore's Straits Times Index (STI) opened 0.08 per cent lower at 2,544.16 in early trade on Thursday (Jan 28).

Japan's Nikkei 225 was down 1.01 per cent after market open, while across the Korean Strait, the Kospi slipped 0.48 per cent.

Down Under, the ASX 200 was down 0.24 per cent in morning trade.

Major Japanese exporters Toyota, Honda and Sony were down between 0.48 and 3.92 per cent. The dollar-yen pair was down 0.20 per cent at 118.42. A stronger yen is a negative factor for exporters as it diminishes their overseas profits when converted back into local currency.

Shares of Sharp were up some 2.26 per cent after Taiwanese manufacturer Foxconn provided further details of their takeover bid to the electronics maker and its lenders. Reuters, citing a source familiar with the matter, reported that part of its 600 billion yen takeover bid includes a promise to not cut jobs. Foxconn founder and chairman Terry Gou has also reportedly met government officials to discuss the offer, the report said.

Japan's retail sales for December fell 1.1 per cent on-year, according to government data, showing some weakness in household demand.

Retail stocks reacted mostly negatively to the news with Fast Retailing falling as much as 1.68 per cent before paring some losses to trade 1.01 per cent lower. Seven & I was down 0.20 per cent, Takashimaya down 0.20 per cent, and Aeon was flat.

In Seoul, shares of tech giant Samsung Electronics were down 2.13 per cent. Before market open, the company reported its October-December profit rose 16.2 per cent on-year, in line with earlier estimates. The company said its fourth-quarter operating profit was 6.1 trillion won ($5.05 billion), while revenue was up 1.1 per cent to 53.3 trillion won. While the company issued a tepid outlook due to expectations of challenging smartphone sales, it also announced plans for a share buyback.

On the upside, Australian resources stocks were mostly in positive territory, with shares of Rio Tinto and BHP Billiton, two of Australia's largest miners, up 2.18 and 0.87 per cent respectively. Oz Minerals was down 1.29 per cent.

Shares of Fortescue were up 7.19 per cent. The company said iron ore shipments for the previous quarter were roughly flat, but that it reduced net debt further as it drives down production costs. Iron ore shipments for the three months through December were at 42.1 million metric tons, compared with 41.9 million tons in the previous three months.

Reports said the Australian port operator Qube Holdings announced state-owned China Investment Corp. joined a consortium that made a fresh takeover offer for ports and rail giant Asciano.

The consortium, which comprises Qube, Global Infrastructure Management, the Canada Pension Plan Investment Board, and recently China Investment, made a A$8.9 billion ($6.25 billion) - or A$9.17-per-share cash and shares - offer for Asciano, which already has an existing offer from Canada's Brookfield Asset Management, which it supports. The company said in a statement its board is also considering the Qube offer.

Shares of Asciano were up 3.41 per cent, while Qube fell 0.71 per cent.

Elsewhere, shares of South Korea-based internet company Naver were down 4.01 per cent as the company reported a 5 per cent jump in on-year profits for the October-December quarter, which fell short of expectations.

Overnight, the Fed opted not to raise interest rates at its January meeting and gave no indication that it was changing course on its rate-hiking path ahead.

In its post-meeting statement, the Fed tweaked its view of the US economy, noting that growth had slowed, business investment has moderated and inventory investment has decelerated. The central bank said it was "closely monitoring global economic and financial developments and is assessing their implications for the labour market and inflation, and for the balance of risks to the outlook."

US stocks sold off on concerns that the Fed could now be signaling weaker growth with its comments, but not offering fresh guidance on rate hikes.

The Dow Jones industrial average was down 222.77 points, or 1.38 per cent, at 15,944.46, while the S&P 500 fell 20.68 points, or 1.09 per cent, to 1,882.95. The Nasdaq composite finished lower by 99.51 points, or 2.18 per cent, at 4,468.17.

The central bank also said inflation was expected to remain low in the near term due in part to further declines in energy prices. But it sees the effects as transitory.

Oil prices saw an uptick in US trade after reports emerged non-OPEC oil producer Russia was discussing the possibility of co-operation with OPEC. It fanned hopes that a deal was in the works to reduce oversupply which has sent prices to 12-year lows.

US crude futures were up 85 cents at $32.30 a barrel, while the global benchmark Brent rose $1.34 to $33.14 a barrel.

Elsewhere, the Bank of Japan starts its two-day policy meeting on Thursday.

On the earnings front, major companies in Japan and South Korea including Fanuc, Posco and Kawasaki Heavy Industries are set to announce earnings.

- Patti Domm contributed to this report.

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