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Asia markets mixed; China's Jan-Feb economic data paints rosy picture

Asian equities wavered on Tuesday, ahead of the Federal Reserve's two-day monetary policy meeting and as European political uncertainty weighs on sentiment.

Market expectation for a U.S. rate hike is at 93.0 percent, according to CME Group's FedWatch Tool at 2:55 pm HK/SIN.

Ahead, traders will be cautious as they eye Federal Open Market Committee's upcoming decision and look for clues on how quickly the U.S. central bank is planning to tighten monetary policy.

"Solid U.S. employment growth of 235,000 in February, a fall in unemployment and a slight rise in wages growth keep the Fed on track to raise interest rates again this coming Wednesday," said Shane Oliver, head of investment strategy and chief economist at AMP Capital, in a weekly note.

"However, with U.S. monetary policy a long way from being tight, future rate hikes likely to be gradual and U.S. economic data likely to be solid we don't see it derailing the bull market in shares," Oliver said.

But aside from the Fed, European political uncertainty could also affect Asian equities by weighing on sentiment, Margaret Yang, market analyst at CMC Market said in a Tuesday note.

She cited the Dutch elections on Wednesday as a risk, as "Netherland's far-right Party for Freedom could emerge as one of the largest parties."

In addition, the possibility of U.K. Prime Minister Theresa May triggering Article 50 to formally begin the Brexit process and Scotland holding another independence referendum could also weigh on Asian markets and currencies.

The euro was trading at $1.0644 at 2:55 p.m. HK/SIN, weaker compared to levels around $1.05 seen last week, while the pound was also weaker against the greenback, at $1.2165.

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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Over in Japan, the Nikkei 225 finished down 0.12 percent or 24.3 points at 19,609.5.

Toshiba clawed back from earlier losses of more than 8 percent, to trade up 0.47 percent at 215.9 yen per stock.

The embattled company said it would speed up looking at whether it should sell a majority of its overseas nuclear power business, and that it would reduce the number of directors. Toshiba also said it would strengthen global management supervision and increase corporate involvement in risk monitoring at group companies.

Earlier, the Japanese conglomerate announced it would postpone earnings filings again due to the need for more time with auditors to review its U.S. nuclear subsidiary probe.

Machinery manufacturer Tsugami rose 5.16 percent to 774 yen a share, earlier hitting a 10-month high and rising 6 percent, after it announced that it would buy back up to 2 million of its shares, or 3.32 percent of total shares.

The Australian benchmark ASX 200 closed up 0.03 percent or 1.76 points at 5,759.1.

Earlier, a National Australia Bank's monthly business survey of more than 400 firms showed that the index of business conditions fell 7 points to +9 in February. All sectors except retail reported improved conditions last month.

South Korea's Kospi closed up 0.76 percent or 16.2 points at 2,133.78, even as the country remains engulfed in political uncertainty after the impeachment of President Park Geun-hye last Friday.

Hyundai Engineering signed a deal with an Iranian investment fund on Sunday for a 3.2 billion euro ($3.2 billion) petrochemical project, which is awaiting financing by Korean banks, Reuters reported. Shares of Hyundai Engineering were down 0.41 percent at 48,150 won per stock.

On the mainland, the Shanghai composite closed up 0.05 percent or 1.6 points at 3,238.62 while the Shenzhen composite fell 0.14 percent or 2.78 points at 2,027.1.

China's January to February economic data painted a rosier picture of the world's second largest economy. Industrial output grew by 6.3 percent in the first two months of the year, from the same period a year before, fixed asset investment grew 8.9 percent on-year. Private investment rose by 6.7 percent from 3.2 percent in the same period last year.

But retail sales growth missed expectations, up just 9.5 percent in January and February on-year, lower than analysts' median forecast of a 10.5 percent increase.

Goldman Sachs upgraded China's stocks to "overweight" on Monday, saying that the increasing producer price index will translate to better corporate revenues and easing credit stress in the short-term. The investment bank also added that Chinese banks had brighter credit outlook and loan pricing.

Over in Hong Kong, the Hang Seng index was down 0.15 percent by 3:00 p.m. HK/SIN.

In the broader currency market, the greenback climbed higher, at 101.5 against a basket of currencies, above levels around 101.2 seen yesterday. At 3:04 pm HK/SIN, the yen weakened against the dollar to 115.07, while the Australian dollar was at $0.7551.

Oil prices began to reverse losses on Tuesday Asian time. Brent crude futures added 0.12 percent to $51.29 a barrel, while U.S. crude was up just 0.04 percent to $48.42.

Stateside, the Dow Jones industrial average fell 0.1 percent to close at 20,881.48. The S&P 500 index inched up 0.04 percent to close at 2,373.47 and the Nasdaq added 0.24 percent to finish at 5,875.78.

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