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Asia closes mostly lower following release of China industrial data; Fed awaited

  • China retail sales and factory output pipped expectations, but investment cooled
  • Oil prices fell after surprise build in U.S. stocks
  • Markets awaiting the Federal Reserve's decision on monetary policy in the U.S.

Equities in Asia closed mostly lower on Wednesday as China data came in mostly in line with expectations and markets awaited the Federal Reserve's decision on monetary policy.

Japan's Nikkei 225 dipped into negative territory to close lower by 0.08 percent or 15.23 points at 19,883.52. South Korea's benchmark Kospi index edged lower by 0.09 percent or 2.06 points to finish the session at 2,372.64.

The S&P/ASX 200 surged 1.06 percent or 61.134 points to close at 5,833.9, with most sub-indexes trading higher, led by the strength in the information technology and health sub-indexes.

Greater China markets traded lower after the release of economic data earlier in the session. The Hang Seng Index was off by 0.02 percent at 3:00 p.m. HK/SIN. On the mainland, the Shanghai Composite closed lower by 0.74 percent or 23.3004 points at 3,130.4425. The Shenzhen Composite edged lower by 0.382 percent or 7.0957 points to end at 1,852.7853.

Symbol
Name
Price
 
Change
%Change
NIKKEI
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HSI
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ASX 200
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SHANGHAI
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KOSPI
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CNBC 100
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Data from China reflected that factory output for the month of May pipped expectations, as did retail sales. However, fixed-asset investment in the world's second-largest economy came in below expectations.

Investors are also waiting for the Federal Reserve to announce its decision on monetary policy in the U.S., due at 2 a.m. HK/SIN on Thursday. The Fed is widely expected to raise interest rates, with markets looking for details regarding the reduction of the central bank's massive balance sheet.

Oil prices took a beating on reports from the American Petroleum Institute (API) that crude stocks had risen instead of drawing down as expected. Brent crude futures fell 0.72 percent to trade at $48.37 a barrel and U.S. West Texas Intermediate crude tumbled 0.9 percent to trade at $46.04.

The API estimates are followed by official data from the Energy Information Administration (EIA) on Wednesday. The two sets of figures often diverge.

Shares of Toshiba were under pressure after the company gave notice that compensatory damages had been filed against it due to "accounting issues." Toshiba said that more than 43 billion yen ($399 million) of damages were sought. The company could also postpone filing its annual report, Reuters quoted Japanese media as saying.

Even with news this morning that South Korean chip maker SK Hynix had joined the fray in bidding for Toshiba's semiconductor arm, shares of the latter were down 3.95 percent.

The dollar was softer against a basket of rival currencies, with the dollar index trading at 96.894 at 2:35 p.m. HK/SIN compared to levels around the 97 handle seen in previous sessions. Dollar/yen was mostly flat at 110.06, after the pair slipped below the 110 handle earlier this week.

The Canadian dollar continued to trade around three-month highs, with the greenback last fetching 1.3218 Canadian dollars.

Cable was firmer at $1.2778 after slipping to levels around the $1.26 handle earlier this week on political uncertainty in the U.K.

"Regardless of the current upside gains, the British pound remains vulnerable to heavy losses with the outlook tilted to the downside as political instability in the U.K. weighs heavily on the currency," FXTM Research Analyst Lukman Otunuga said in a Tuesday evening note.

The hung parliament result following the U.K. election might have prompted optimism for a softer Brexit, but the sterling remained "overshadowed" by instability in Westminster, Otunuga added.

In New Zealand, the current account deficit widened to NZ$8.13 billion in the first quarter on year, compared to a gap of NZ$7.28 billion seen. The kiwi dipped 0.15 percent to 0.7210 to the dollar after the data. The New Zealand dollar last traded at $0.7236.

Over in the U.S., stocks closed higher, with big name tech stocks bouncing back after a two-day slide.