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16 Mar 2021 | 11:16

Asia report: Markets finish firmer ahead of key Fed meeting

(Sharecast News) - Bourses in Asia were higher across the board on Tuesday, as investors held their breath ahead of a key Fed meeting later in the day. In Japan, the Nikkei 225 was up 0.52% at 29,921.09, as the yen remained stable against the dollar, last trading at JPY 109.13.

Uniqlo owner Fast Retailing was down 0.21%, while among the benchmark's other major components, robotics specialist Fanuc added 0.22% and technology giant SoftBank Group was 2.41% higher.

The broader Topix index gained 0.65% to end its trading session in Tokyo at 1,981.50.

On the mainland, the Shanghai Composite was 0.78% firmer at 3,446.73, and the smaller, technology-centric Shenzhen Composite rose 1.08% to 2,196.51.

South Korea's Kospi added 0.7% to 3,067.17, while the Hang Seng Index in Hong Kong was ahead 0.67% at 29,027.69.

The blue-chip technology stocks were in the green in Seoul, with Samsung Electronics up 1.22% and SK Hynix 2.93% firmer.

Sentiment was rosy from the start of the Asian day, as investors woke up to another session of gains on Wall Street overnight, where the Dow Jones Industrial Average and the S&P 500 managed record closes yet again as economic optimism abounded stateside.

Participants were looking ahead to the Federal Open Market Committee's meeting for March, however, with the two-day event due to begin later in the global day.

Commentators have recently been questioning whether the Fed would be looking to unwind its current, loose monetary policy in the face of a rebounding American economy, with the central bank's quarterly dot plot set to direct expectations on interest rates for the coming months.

Russ Mould, investment director at AJ Bell, said a strong finish in the US overnight and robust trading in Asia was giving global markets a boost on Tuesday morning.

"For once words might speak louder than actions when the US Federal Reserve meets tomorrow," he said.

"It seems unlikely there will be any move on interest rates immediately but, after the recent jump in bond yields amid growing fears over rising inflation, the market will be desperate for signals on the pace and direction rates are likely to take."

Oil prices were lower as the region went to bed, with Brent crude last down 1.35% at $67.95 per barrel, and West Texas Intermediate falling 1.39% to $64.48.

In Australia, the S&P/ASX 200 was ahead 0.8% at 6,827.10, with most sectors in the green in Sydney.

The energy and materials subindices were the exception, however, losing 0.17% and 0.65%, respectively.

Among the country's energy plays, Santos was down 1.09% and Woodside Petroleum was 0.63% weaker, while in materials, BHP was off 2.09% and Rio Tinto lost 1.11%.

The Reserve Bank of Australia published the minutes from its March policy meeting during the session, which confirmed that the central bank expected current, easy policy to continue for some time.

"It would be some years before the Bank's goals for inflation and unemployment were achieved," the minutes read.

Across the Tasman Sea, New Zealand's S&P/NZX 50 advanced 0.77% to 12,689.05, led higher by energy generator Mercury NZ, which jumped 5.3%.

It was revealed in the previous session that the company was part of a consortium of New Zealand and Australia companies buying out Australasia-focussed wind farm operator Tilt Renewables.

Tilt was put up for sale last year, when infrastructure investor and two-thirds shareholder Infratil said it was reviewing its investment.

Shares in Infratil closed down 1.14% in Wellington on Tuesday.

The down under dollars were both weaker against the greenback, with the Aussie last off 0.23% at AUD 1.2924, and the Kiwi retreating 0.22% to NZD 1.3914.
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