Asian shares mostly lower despite Dow's push over 36,000

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Shares were mixed in cautious trading in Europe and Asia ahead of the Federal Reserve’s meeting Wednesday.

After that meeting the U.S. central bank is expected to disclose plans to ease the extraordinary support measures it deployed to shore up markets and the economy during the pandemic.

Fed Chair Jerome Powell has signaled that after its policy meeting the Fed will announce plans to start paring its $120 billion in monthly bond purchases as soon as this month. Those purchases are intended to keep long-term loan rates low to encourage borrowing and spending.

“Markets are largely in wait-and-see mode ahead of the U.S. Fed meeting. The question is not so much one of tapering, which at this point seems a foregone conclusion, but more about the timing of future rate hikes,” Mizuho Bank said in a commentary.

Germany’s DAX edged less than 0.1% lower to 15,497.84, while the CAC 40 in Paris inched up 0.1% to 6,935.01. In London, the FTSE 100 was flat at 7,273.75.

The futures for the Dow industrials and S&P 500 were barely changed.

Tokyo’s markets were closed for a holiday.

Hong Kong’s Hang Seng index dropped 0.3% to 25,024.75 while the Shanghai Composite index lost 0.2% to 3,498.54 after Chinese Premier Li Keqiang remarked about downward pressures on the economy.

In remarks carried by the official Xinhua News Agency, Li said the government needs to provide more support for smaller companies, reduce taxes and fees, “do a good job in ensuring the supply and price stability of electricity and coal and take strong measures to support manufacturing.”

The Kospi in Seoul gave up 1.3% to 2,975.71, while Sydney’s S&P/ASX 200 surged 0.9% to 7,392.70. Taiwan also advanced.

Most Asian countries have kept their monetary policy loose to deal with the fallout from pandemic-related shutdowns and travel restrictions. But some central banks have begun easing up on the accelerator in response to surging prices.

That includes New Zealand, where the unemployment rate has fallen to 3.4%, its lowest level in 14 years, despite a lockdown in the largest city of Auckland, Statistics New Zealand reported Wednesday. The country’s share benchmark was barely changed.

New Zealand’s Reserve Bank doubled the benchmark rate to 0.5% last month in its first hike in more than seven years. The jobless figures, along with high inflation numbers, will keep pressure on the nation’s central bank to continue raising interest rates.

On Tuesday, the Dow gained 0.4% to 36,052.63, while the S&P 500 index extended its winning streak into a fourth day, climbing to 4,630.65. The Dow gained 0.4% to 36,052.63, and the tech-heavy Nasdaq added 0.3% to 15,649.60.

The Russell 2000 index hit its first all-time high since March, picking up 0.2% to 2,361.86.

Investors have been mining corporate earnings for clues as to how companies are faring as the economy moves past the pandemic.

Bond yields slipped. The yield on the 10-year Treasury fell to 1.52% from 1.54% late Tuesday.

Later Wednesday, investors will get an update on services, which make up a big part of the U.S. economy, when the Institute for Supply Management releases its service sector index for October.

The central bank’s plan to trim its bond purchases also comes as businesses and consumers contend with higher costs for raw materials and finished goods. Supply chain problems are cutting into corporate finances and prompting companies to raise prices.

The employment market recovery is another focus for the central bank. The job market has lagged the rest of the economic recovery as people hesitate to return to work. Investors will get another update Friday when the Labor Department releases its jobs report for October.

In other trading, the U.S. dollar fell to 113.87 Japanese yen from 113.97 yen. The euro rose to $1.1589 from $1.1580.

Benchmark U.S. crude lost $1.58 to $82.33 per barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the basis for international pricing, shed $1.49 to $83.23 per barrel.


Associated Press writer Nick Perry in Wellington, New Zealand contributed.