By Daniel Inman
Southeast Asian markets notched up healthy returns for a week
that was dominated by developments suggesting that U.S. monetary
policy could remain easier than previously expected.
On Monday, stocks rose on news that Lawrence Summers withdrew
from the race to become the next chairman of the Federal Reserve --
a candidate expected to roll back the central bank's stimulus soon
after taking the post.
Markets on Thursday received another boost from the Fed's
surprise decision to keep its monetary policy steady, going against
widespread expectations for the bank to start reducing its
bond-buying program.
As a result, Southeast Asian markets that had been beaten down
over the summer made substantial gains. The fear of a removal of
U.S. stimulus efforts, which had supported these small markets in
recent years, prompted investors to pull their money out of
countries like Indonesia and the Philippines.
The gains this week helped the recovery of these markets:
Indonesia's JSX was 6.5% higher since last Friday and Thailand's
SET jumped 5.7% over the same period.
On Friday, Asian stocks took a pause after the previous
session's strong gains: Australia's S&P/ASX 200 fell 0.4%,
Indonesia's JSX fell 1% and the Philippines PSE Composite dropped
0.5%.
"Today looks like being one of those Fridays where markets take
stock after a big news week," said Ric Spooner, chief market
analyst at CMC Markets. "We may see some profit-taking by short
term sellers disappointed that yesterday's strong upward momentum
was not followed through," Spooner added.
Japan's Nikkei fell 0.2% as the U.S. dollar weakened slightly in
Asia after it strengthened against the yen (USDJPY) Thursday. The
greenback was at Yen99.25 Friday, after a 1.6% gain in the previous
session.
In Tokyo, real estate firm Mitsubishi Estate Co. (MITEF) rose 1%
after the average land price in greater Tokyo, Osaka and Nagoya
rose 0.1% on year as of July 1, the first on-year rise in five
years.
Also in Tokyo, retailer Aeon Co. (AONNF) dropped 0.5% after a
Nikkei report said that the company's consolidated operating profit
for the six months ending Aug. 31 will likely fall short of market
consensus.
Much of North Asia was closed for public holidays Friday, with
mainland China, Hong Kong and South Korea shut. Markets in Shanghai
and Seoul were closed on Thursday as well, which means that they
haven't had a chance to react to the Fed's latest policy
decision.
When these markets reopen Monday, there will also be a data
point on the Chinese economy in the form of preliminary
manufacturing data for September -- a number that has impacted
markets in recent months.
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