Asian stocks mixed after choppy US session

Employees work at the Tokyo Stock Exchange (TSE), operated by Japan Exchange Group Inc (JPX), in Tokyo. (Bloomberg pic)

SYDNEY: Asian stocks looked set to open mixed following a volatile US session that saw stocks end the day flat while Treasuries climbed with the yen. Crude oil slumped more than 7%.

The S&P 500 Index ended virtually unchanged as investors braced for Wednesday’s Federal Reserve policy decision against the backdrop of recent turmoil in global markets that’s put equities on course for the worst year since 2008.

Earnings after hours from FedEx may damp sentiment, with the shares dropping almost 5% after a lower profit forecast stoked doubts about the strength of global trade.

Futures indicated a lower start for stocks in Japan, while Hong Kong and Chinese shares signalled gains.

The benchmark US oil grade dropped more than 8% at one point, tumbling past US$46 (RM193) a barrel as traders fretted about the outlook for growth. The dollar was mixed against most G-10 peers.

While an interest-rate increase from the Fed on Wednesday is widely expected, it’s rare for the central bank to do so during such market turmoil, offering a ray of hope to some investors hoping they opt to pause.

President Donald Trump continued with his criticism of policy makers, warning them to avoid “yet another mistake” just hours before the two-day meeting began.

“We’re still in a very treacherous trading environment here, and I don’t think we’ve seen any signs yet that we’re getting out of that,” said Matt Forester, the chief investment officer at BNY Mellon’s Lockwood Advisors. “We have to continually be careful.”

Beyond the Fed looms more trouble for markets: on Friday night, spending authority expires for a swathe of the US government unless Trump and Congress reach a deal.

Trade tensions remain in focus as US Treasury Secretary Steven Mnuchin said US and China are planning to hold meetings in January to negotiate a broader truce but are unlikely to have any face-to-face contact before then.

Elsewhere, investors in Japan will be watching the first trading day for SoftBank Group Corp.’s ¥2.65 trillion (RM99 billion) initial public offering of its Japanese telecommunications business.