Asian shares close higher on Wall St, cautious ahead of FOMC meeting

Asian shares close higher on Wall St, cautious ahead of FOMC meeting

	Published : Tue, 20 Mar 2007 08:50 By : Agencies Print this Story

HONG KONG (XFN-ASIA) - Shares across the Asia-Pacific region closed higher after Wall Street rose overnight but with markets cautious ahead of the US FOMC meeting, dealers said.

Tokyo shares finished up after the rebound in US stocks and the yen's slide overnight encouraged buying, although trading was somewhat cautious prior to the US Federal Reserve's two-day policy board meeting later today, dealers said.

They said investors were also unwilling to take aggressive positions as the Japanese market will be closed tomorrow for a public holiday.

They added that the Bank of Japan's decision to keep interest rates unchanged, announced early afternoon, came as no surprise as the market had been widely expecting the bank to leave its rate policy unchanged before upper house elections this summer.

The blue-chip Nikkei 225 Stock Average closed up 153.65 points or 0.90 pct at 17,163.20, off a high of 17,267.74.

The TOPIX index of all issues listed on the Tokyo Stock Exchange's first section was up 14.21 points or 0.84 pct at 1,708.29, off a high of 1,718.99.

After the market's close, the central bank also said it has left its assessment of economic and financial developments unchanged for March, saying the economy continues to expand moderately.

Dealers said while the market was waiting to hear BoJ Governor Toshihiko Fukui's remarks about the economy at a press conference later today, their attention was mainly focused on the FOMC's reaction to the troubled sub-prime lending business.

'Eyes are on whether the FOMC will remove the phrase suggesting a possible rate hike ahead,' said Kazuhiro Takahashi, equities manager at Daiwa Securities SMBC.

He said investors will likely resume buying stocks actively on continuing hopes for corporate earnings growth once the FOMC meeting is out of the way, along with uncertainties over the outlook for US stocks and currency markets.

Australian shares ended higher with sentiment buoyed by the overnight rise on Wall Street and ongoing local merger and acquisition activity, dealers said.

Bank stocks rose on speculation of further consolidation in the sector following a merger proposal involving two regional banks and resource stocks were also supported despite mixed metal prices in overnight London trading.

The S&P/ASX 200 closed up 23.2 points or 0.40 pct at 5,882.9 after trading between a high of 5,922.2 and a low of 5,871.5.

Hong Kong shares were stronger in afternoon trade on expectations of strong results from blue chips, dealers said.

The rebound on Wall Street bolstered sentiment although gains were capped by caution ahead of the US Federal Reserve policy meeting and worries that China might adopt more tightening measures following the interest rate hike announced over the weekend, they added.

At 3.25 pm the Hang Seng Index was up 117.73 points or 0.61 pct at 19,384.47.

In mainland China, A-shares in Shanghai and Shenzhen closed higher on follow-through interest with metal and property stocks gaining ground, dealers said.

The Shanghai A-share Index was up 18.32 points or 0.58 pct to 3,186.04 and the Shenzhen A-share Index was up 10.72 points or 1.31 pct at a record 829.53.

Seoul shares finished slightly higher, with investors awaiting the outcome of the US FOMC meeting, dealers said.

Initial sentiment was bolstered by Wall Street's overnight rally but the market moved back and forth with some profit taking by institutions after three consecutive sessions of solid gains.

Banks enjoyed sustained interest from foreign investors amid a strong quarterly earnings outlook, they added.

The KOSPI index closed up 0.78 points or 0.05 pct at 1,444.17, off a low of 1,440.42 and a high of 1,449.67.