Singapore shares 0.5% lower as Asia markets open mixed

Singapore shares 0.5% lower as Asia markets open mixed

Asia stocks were mixed on Tuesday, after energy plays led to a decline in US equities overnight, and as investors likely took to the sidelines ahead of major central bank monetary policy decisions due later in the week.

Singapore shares opened 0.5 per cent lower, with The Straits Times Index (STI) down 14.57 points to 2,885.71, The Business Times reported.

Australia's ASX 200 down 0.16 per cent, Japan's Nikkei 225 was off 0.51 per cent, while the Kospi gained 0.12 per cent.

The US Federal Open Market Committee (FOMC) begins its two-day policy meeting later today local time, while decisions from the Reserve Bank of New Zealand and the Bank of Japan are due Thursday Asia time. Most analysts expect the Fed to stand pat on rates, while half of the analysts polled by Reuters expect the Bank of Japan (BOJ) to ease its monetary policy further.

"The Fed is unlikely to signal June as a potential rate hike meeting, but September is likely to see its market pricing firm alongside inflation expectations," said Angus Nicholson, a market analyst at IG.

For the BOJ, Nicholson expects an expansion in its ETF purchase programme but "a further expansion of their bond purchases or cutting rates into deeper negative territory seems less likely."

Oil prices advanced during Asian hours, after dropping overnight following data showing another build up in US crude inventories.

US crude futures were up 0.7 per cent at $42.94 a barrel, after dropping 2.5 per cent overnight, while Brent futures added 0.58 per cent to US$44.74 (S$60.57), following a 1.4 per cent decline in US hours.

Energy plays in the region were mostly lower, with Santos down 0.65 per cent, Inpex dropping 2.63 per cent and Japan Petroleum down 2.1 per cent. Woodside Petroleum added 0.61 per cent

According to Reuters, market intelligence firm Genscape reported that US crude stockpiles at the Cushing, Oklahoma delivery point rose by over 1.5 million barrels in the week to April 22.

Elsewhere, Bloomberg News reported Saudi Arabia would complete the expansion of the Shaybah oilfield by the end of May. Citing sources with knowledge of the plan, Bloomberg News said this would increase Shaybah's output capacity from 750,000 barrels a day to 1 million barrels.

Ray Attrill, global co-head of foreign exchange strategy at the National Australia Bank, said of oil, "Given the news flow, the surprise perhaps is that the falls haven't been bigger."

In the currency market, the dollar retreated against a basket of currencies; the dollar index had fallen 0.12 per cent at 94.728 as of 8:30 a.m. HK/SIN. This was compared to the 95 level the index touched on Monday during Asian hours.

Kathy Lien, managing director of foreign exchange strategy at BK Asset Management, said she expected the dollar to "trade quietly" ahead of the FOMC meeting.

"While no one expects any changes from the central bank, their guidance will play a significant role in the dollar's performance in the days and weeks ahead," said Lien, adding the central bank's comments about recent data disappointments will also be important. "If they say the deterioration is transitory, it will help the dollar."

Recent string of stateside data have somewhat fallen short of market expectations, with the latest being the new single-family home sales in March, which fell 1.5 per cent - though the decline was concentrated in the West region.

The Japanese yen maintained the 111 handle against the dollar, but traded at the lower end of the handle at 111.05 Tuesday morning Asia time. On Monday, the pair traded near 111.86 level.

Major Japanese exporters were mostly lower, with shares of Toyota down 0.82 per cent, Nissan down 0.57 per cent and Honda off 0.53 per cent. Shares of Sony rebounded from Monday's losses to trade up 1.23 per cent.

Stateside, the Nasdaq composite posted its first three-day losing streak since Feb. 9, finishing down 0.21 per cent. The Dow Jones industrial average finished down 0.15 per cent, while the S&P 500 ended lower by 0.18 per cent.

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