Shares in Asia weaker as investors eye possible central bank policy step

June 9, 2016

Shares in Asia weaker as investors eye possible central bank policy step – Shares in ASia drifted weaker on Thursday with investors cautious on growth prospects and looking again to central banks in Japan and China on policy steps,

The S&P/ASX 200 eased 0.53%, while the Shanghai Composite index fell 0.30%. TheNikkei 225 was down 0.91%.

In China, CPI data for May showed a drop of 0.5% month-on-month, more than the 0.2% fall seen, and 2.0% gain year-on-year, less than the 2.3% increases expected, whileproducer prices eased 2.8%, less than the 3.3% year-on-year drop expected.

The weaker inflation raised questions on whether the People’s Bank of China would ease further this year, particularly after official forecasts raised the overall outlook for prices earlier this year.

Earlier in Japan, core machinery orders for April plunged 11.0%, compared with a 3.8% drop seen month-on-month and at a 8.2% decline year-on-year compared with a 2.3% drop seen.

Overnight, U.S. stocks remained near multi-month highs on Wednesday, as markets took a pause from a recent stretch of extreme volatility on a quiet day of trading.

The Dow Jones Industrial Average added 66.77 or 0.37% to 18,005.05, for its third straight winning session and its sixth over the last eight trading days. Since falling to two-month lows on May 19, the Dow has rallied by nearly 700 points or 2.5%. With the gains, the Dow closed above 18,000 for the first time since late-April.

The S&P 500 Composite index, meanwhile, posted fractional gains to hit fresh 7-month highs before closing at 2,119.12, up 6.99 or 0.33% on the day. For the session, eight of 10 sectors closed in the green as stocks in the Basic Materials, Utilities and Industrials led. Energy stocks lagged even as U.S. crude futures jumped to their highest level since last July, before settling above $51 a barrel.

The S&P 500 remains approximately 1% below its all-time record high. TheNASDAQ Composite index gained 12.89 or 0.26% to 4,974.64, amid strong performances from Alphabet Inc (NASDAQ:NASDAQ:GOOGL) and Tesla Motors Inc (NASDAQ:NASDAQ:TSLA).

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