Asian shares subdued in early trading
Asian shares edged lower in early trading on Tuesday, taking their cues from a modestly lower day on Wall Street.
|||Tokyo - Asian shares edged lower in early trading on Tuesday, taking their cues from a modestly lower day on Wall Street as US crude oil prices slid.
The Reserve Bank of Australia's policy board will decide on Tuesday whether rates should be left at 1.75 percent or trimmed a quarter point to a new record low, with most analysts predicting the need to combat low inflation and a rising currency will win the argument for more stimulus.
Not all commentators, however, are convinced the RBA will announce a rate cut when its decision is made public at 04h30 GMT.
“The majority of economists surveyed expect the RBA to cut interest rates by 25 basis points but we feel that a rate cut is not a done deal,” wrote Kathy Lien, managing director of FX strategy for BK Asset Management.
She noted that since the last RBA meeting in July, manufacturing activity and consumer prices had increased, full time job growth had rebounded, and business confidence had improved.
“Granted consumer confidence is down and the unemployment rate ticked up, (but) we're not sure if this is enough for the RBA to pull the trigger on easing in August,” Lien said.
Australian shares were 0.1 percent lower.
MSCI's broadest index of Asia-Pacific shares outside Japan was down 0.2 percent in early trading. The S&P 500 had hit an intraday record high overnight, but was unable to hold gains.
Hong Kong was bracing for Typhoon Nida, shutting down most of the financial hub.
Japan's Nikkei stock index slipped 0.8 percent in early trade, as the dollar edged lower against the yen.
Prime Minister Shinzo Abe's cabinet is likely to approve a 28 trillion yen ($273 billion) stimulus package on Tuesday, though direct fiscal spending will total only about 7 trillion yen, according to two people briefed on the matter.
The dollar was down 0.1 percent at 102.31 yen, while the euro was 0.1 percent higher at $1.1172.
The dollar index, which tracks the US currency against a basket of six major peers, was steady at 95.711, holding above Friday's 95.384, its lowest since July 5.
US crude oil edged up 0.3 percent to $40.18 a barrel, after shedding 3.7 percent on Monday, while Brent crude was 0.5 percent higher at $42.35 after closing down 3.2 percent.
US crude tumbled below $40 per barrel on Monday for the first time since April, on heightened worries of a supply glut despite peak summer gasoline demand.
REUTERS