3 weeks ago
Stock Market

Asian Equities Edge Up; Powell’s Comments, Trump-Kim Summit in Focus

Investing.com - Asian equities edged up in morning trade on Wednesday following comments from U.S. Federal Reserve Chairman Jerome Powell

Investing.com - Asian equities edged up in morning trade on Wednesday following comments from U.S. Federal Reserve Chairman Jerome Powell overnight.

China’s Shanghai Composite and the Shenzhen Component gained 0.8% and 0.1% respectively by 9:51 PM ET (02:51 GMT).

Hong Kong’s Hang Seng Index also rose 0.4%.

South Korea’s KOSPI was up 0.2%. Hyundai Motor (KS:005380)'s shares surged around 4% after the company rejected on Tuesday a payout call by activist investor Elliot Management.

Japan’s Nikkei 225 traded 0.5% higher.

Down under, Australia’s ASX 200 was up 0.2%.

Powell delivered his testimony to a U.S. Senate committee overnight, warning headwinds from overseas but noted the U.S. economic outlook was “generally favourable”.

“While we view current economic conditions as healthy and the economic outlook as favourable, over the past few months we have seen some crosscurrents and conflicting signals,” Powell said, adding that the central bank is monitoring how Brexit negotiations and Sino-U.S. trade talks play out. “We will carefully monitor these issues as they evolve.”

On the balance sheet roll-off specifically, Powell says the Fed is prepared to “adjust” the program if conditions warrant. The comment contradicted with his earlier remarks where he described the balance sheet roll-off as being on “autopilot.”

“I would note that we are prepared to adjust any of the details for completing balance sheet normalisation in light of economic and financial developments. In the longer run, the size of the balance sheet will be determined by the demand for Federal Reserve liabilities such as currency and bank reserves,” he said.

A meeting between U.S. President Donald Trump and North Korean leader Kim Jong Un is also in focus, although experts said the two sides have low expectations from this week’s talks.

Washington has demanded Pyongyang to abandon all its nuclear and missile programs, while North Korea wants sanctions to be removed as part of denuclearisation negotiations.

On Wednesday, Bloomberg reported that the two sides have not agreed on the meaning of denuclearisation, or even the ultimate purpose of the talks this week. Key details of the meeting remained a mystery, the report added.