Asian markets swung in and out of positive territory on Wednesday as investors brushed off another record close on Wall Street and looked ahead of the Federal Reserve’s latest policy meeting.
The Dow and S&P 500 clocked up another day of all-time highs, lifted by financials ahead of an expected interest rate hike by the Fed, while there were also signs that much-anticipated tax cuts were moving closer, reports BSS.
Bloomberg News reported Republican senators as saying lawmakers in both houses of Congress were making progress in reconciling two tax reform bills and a final draft could be agreed imminently and it could go to a vote by next Tuesday.
Bets on the market-friendly tax cuts being introduced helped drive a surge in global markets this year and while equities have stuttered in recent weeks analysts suggested more gains could come.
“Apparently, the bull market has ways to run despite 2017 froth as tax cuts are expected to extend the current rally shelf life,” said Stephen Innes, head of Asia-Pacific trading at OANDA.
However, Asian dealers were unable to take up the baton from New York and by the break, Tokyo was down 0.3 percent, Shanghai was marginally down and Singapore shed 0.3 percent.
Hong Kong added 0.3 percent and Sydney was barely moved. Seoul added 0.4 percent and Taipei put on 0.2 percent.
Traders are awaiting the end of the Fed’s two-day meeting, which is widely expected to see the central bank lift borrowing costs again, though the crucial event is outgoing chair Janet Yellen’s statement.
Market-watchers will be dissecting her comments for signals about next year’s timetable for lifting rates but with the rate rise already baked into prices, there was little movement in the dollar in Asia.
Bitcoin edged up slightly to $16,880 according to Bloomberg News, with the cryptocurrency seeing a degree of stability in recent days following this month’s stratospheric rise to multiple records.
However, while there are warnings of a massive bubble bursting, some analysts say the digital unit could continue to rally, having already increased 20-fold this year.
“Bitcoin has fixed supply and growing demand. Think of it less as a currency and more as a stock which has a fixed supply of shares on issue and increasing demand. What happens then? Prices rise,” said Greg McKenna, chief market strategist at AxiTrader.
The unit debuted on a major exchange at the weekend, with futures contracts on the unit appearing on the Chicago Board Options Exchange, while it is also expected to list on the rival Chicago Mercantile Exchange next week.
