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Australian trade suspended for the day after technical glitch, but other Asia markets rise

Saul Gravy | Getty Images

A technical glitch halted trading in the Australian stock market for most of the session on Monday, but other Asia markets gained ahead of central bank meetings in the U.S. and Japan later in the week.

The technical glitch delayed the Australian market open and then halted trade in the afternoon before market operator Australian Securities Exchange (ASX) said in a media statement the market would not re-open on Monday, and there would be no closing single price auction.

"ASX will advise the process for determining closing prices, remaining session states and status of orders," the statement said.

In another statement in the late afternoon, the ASX managing director and CEO, Dominic Stevens, said the glitch rose from "a hardware failure in the main database used by the system," which had a "number of knock-on consequences that affected the operation of the market."

Stevens added the issues were not related in any way to cyber security. An ASX spokesman said in the morning that the exchange was continuing to work with its technology vendor to prevent a recurrence.

With the Japanese market also closed Monday for a public holiday, that dampened interest around the region, but the rest of the markets in Asia were mostly higher.

In South Korea, the Kospi closed up 16.42 points, or 0.82 percent, at 2,015.78, after being closed on Friday for a public holiday. Taiwan's Taiex climbed 250.58 points, or 2.81 percent, to 9,152.88, amid gains in stocks tied to Apple's supply chain.

Taiwan-listed Apple-supplier Pegatron jumped 7.21 percent, while Quanta added 5.73 percent and Largan tacked on 5.70 percent.

Deutsche Bank said in a note last week that the latest iPhone was a "boring" device with minor upgrades, but it added, "we believe these minor upgrades could have greater long-term impacts on the supply chain."

Additionally, Citigroup said in a note dated Sunday that demand for the iPhone 7 was exceeding supply, adding that it expected total iPhone units sold in the September quarter would rise 10 percent on-quarter and December quarter sales would rise 67 percent on-quarter.

In Hong Kong, the Hang Seng index was up 0.83 percent in late-afternoon trade. On the Chinese mainland, the Shanghai composite closed up 23.76 points, or 0.79 percent, at 3,026.61, and the Shenzhen composite gained 21.03 points, or 1.06 percent, to 2,001.29.

Investors will look for clarity from the U.S. Federal Reserve on the timing of the next interest rate hike, with many analysts suggesting a rise in September was unlikely following a series of weaker-than-expected economic data.

The Fed's future interest rate projections, commentary from Janet Yellen and the post-Federal Open Market Committee statement will drive markets, according to Ray Attrill, global co-head of foreign exchange strategy at the National Australia Bank.

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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In Japan, the Bank of Japan's (BOJ) policy decision itself would carry sentiment in the market, according to Attrill, along with the release of the central bank's comprehensive review of the efficacy of its policy measures to date, which was also due.

There has been persistent uncertainty over what BOJ Governor Haruhiko Kuroda might do next.

"Our best guess - and it is frankly little more than that - is that the BOJ will elect to take measures that underpin the recent steepening of the yield curve," Attrill said, adding it could be achieved by a combination of adjusting its bond buying program and taking the policy rate deeper into negative territory.

"If they succeed in this without sending equities into a spin, it can help the cause of a (modestly) weaker yen," he added.

Both the Fed and the Bank of Japan are set to begin their two-day policy meetings on September 20.

In the currency market, the dollar pulled back against a basket of currencies, trading at 95.902 as of 3:08 p.m. HK/SIN, slightly lower than an earlier session high of 96.055. The greenback had climbed from levels near 95.344 reached on Friday afternoon Asia time on the back of a higher consumer price index in August stateside.

"Whilst the market is not expecting rates to be raised this month, with only a 20 percent probability, the dollar's rise could be attributed to traders positioning themselves before the FOMC meeting," said Alex Wijaya, a senior trader at CMC Markets.

Among the major currency pairs, the Japanese yen strengthened slightly against the dollar, trading at 102.06, compared with its last close at 102.28. The currency pair will be closely watched ahead of the Fed and BOJ decisions.

Elsewhere, the Australian dollar traded at $0.7534, compared with its last close at $0.7488. The Aussie, which is a commodity currency, likely received a leg-up from higher oil prices on Monday.

U.S. crude futures were up 1.63 percent at $43.73 as of 3:13 p.m. HK/SIN, while Brent was up 1.44 percent to $46.43 a barrel.

OANDA's senior market analyst, Jeffrey Halley, said moves in oil prices will continue to be driven by headlines and rumors ahead of the BOJ and Fed policy decisions on Wednesday.

In company news, electronics giant Samsung closed up 2.03 percent at 1,558,000 won ($1,391.56) a share, following a Wall Street Journal report that said the company sold shares in hard drive maker Seagate Technology, chip maker Rambus, semiconductor-equipment maker ASML Holding and Sharp.

This announcement came in the aftermath of an ongoing recall effort undertaken by the electronic maker for its faulty Galaxy Note 7 handsets. On Friday, Samsung recalled 1 million Galaxy Note 7 smartphones in the United States, according to Reuters.

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