Asian stocks drift as investors await Fed meeting

SEOUL, Korea, Republic Of — Asian stock markets drifted in slow trading on Tuesday as investors awaited the outcome of the Federal Reserve’s meeting and a batch of economic and political events later this week.

KEEPING SCORE: Japan’s Nikkei 225 fell 0.1 per cent to 19,619.14 but South Korea’s Kospi rose 0.6 per cent to 2,129.64. Hong Kong’s Hang Seng lost 0.1 per cent to 23,818.77. The Shanghai Composite Index added 0.1 per cent to 3,238.93. Australia’s S&P/ASX 200 edged 0.1 per cent lower to 5,754.60. Stocks in Taiwan were higher and in Southeast Asia, markets were mixed.

U.S. INTEREST RATES: The Fed is scheduled to hold its rate-setting meeting from Tuesday to Wednesday. Most investors expect the Fed to raise rates for only the third time since they went to nearly zero during the financial crisis in 2008. With strong economic reports in recent weeks, expectations that the Fed may stand pat this month have changed.

ANALYST’S VIEWPOINT: “On the one hand, the market ponders a surprise hold, in which massive unwinding of positions could take place with the hike already priced in,” said Jingyi Pan, a market strategist at IG in Singapore. On the other hand, the Fed could raise interest rates from record lows at a pace faster than expected.