HK Shares Little Changed Ahead Of Fed Meeting

Hong Kong stocks closed marginally lower on Wednesday following three days of gains, with investors trading cautiously ahead of a US Federal Reserve meeting later in the day.

The Hang Seng Index inched down 7 points to 24,725.

The benchmark Shanghai Composite Index slipped 0.36 percent, or 11 points, to 3,283, while the Shenzhen Composite Index on China's second exchange fell 0.91 percent, or 20 points, to 2,185.

Asian stocks were mixed.

Markets have enjoyed something of a respite from the roller-coaster ride seen earlier in the month, which saw a rout of previously surging technology firms, as vaccine hopes and upbeat economic data offset worries about fresh virus spikes and new containment measures.

With US lawmakers unable to agree on a new stimulus package – despite the first running out last month, leaving millions of Americans struggling – the onus has fallen on the central bank to do much of the leg work in supporting the world's top economy.

And while officials are not expected to unveil any fresh measures, having already indicated they will keep interest rates near zero for the foreseeable future, boss Jerome Powell's post-meeting comments will be pored over for an idea about the outlook and clues to future policy.

Wall Street "has priced out rate hikes to 2025, and when coupled with the fact the Fed has already ruled out the possibility of negative interest rates, it will be difficult, if not next to impossible, for the (policy board) to over-deliver on the dovish side tonight", said Stephen Innes at AxiCorp.

But National Australia Bank's Tapas Strickland warned stocks could suffer a pullback if investors were disappointed by the outcome.

"There is a risk the market is underwhelmed by the guidance provided by the Fed," he said in a commentary.

"There is some expectation that with the US Congress unwilling/unable to agree to a new fiscal package, monetary policy may need to step in to fill the void. Accordingly, markets will be focused on any changes to forward guidance and to any balance sheet adjustments."

Sydney rose more than 1 percent, while Mumbai, Singapore, Wellington and Bangkok were also up. Seoul, Manila and Jakarta drifted lower. (AFP)