Asian Market Update : Epic Research Singapore

Asian stocks dropped for a second day as oil tumbled below US$40 a barrel and investors weighed the direction of US monetary policy.

The MSCI Asia Pacific Index fell 0.5 per cent to 128.10 as of 9:08 am in Tokyo, heading for the lowest close in a week. US shares retreated on Wednesday as Federal Reserve Bank of St Louis President James Bullard joined a chorus of US policy makers floating the prospect of an interest-rate hike as soon as April should the economic data warrant it.

"Fed officials this week reminded the market that they still want to move forward with the rate hikes," Mark Lister, head of private wealth research at Craigs Investment Partners in Wellington, which manages about US$7.2 billion, said by phone.

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Asian Market Update : Epic Research Singapore

Asian stocks rose on Thursday (March 17) after the Federal Reserve pared back expectations for interest-rate increases this year.

The MSCI Asia Pacific Index gained 1.1 per cent to 127.54 as of 9 am in Tokyo. Japan's Topix index added 0.6 per cent even after the yen gained 0.6 per cent against the US dollar on Wednesday. South Korea's Kospi index rose 0.5 pe r cent. Australia's S&P/ASX 200 Index gained 0.6 per cent.

The Fed's signal that borrowing costs won't rise as fast as officials previously forecast propelled US stocks to their highest level this year. Japanese shares climbed even after guidance from the US central bank helped strengthen the yen.

"The Federal Reserve has once again come to the market's rescue," said Michael McCarthy, chief market strategist at CMC Markets in Sydney.

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Asian Market Update : Epic Research Singapore

Asian stocks extended gains at levels last seen at the start of the year as crude oil maintained its rally, while bonds in the region declined after a run of data burnished optimism over the US economy.

The benchmark gauge for Asian equities rose a third day, with Japan's Topix index extending its advance at the highest level since Feb 8 as the yen failed to build on Wednesday's rebound.

US crude clung to its rally, trading at US$34.67 a barrel amid declines in American oil production. Malaysia's ringgit jumped with the Korean won.

Yields on Australian government debt due in a decade rose to a two-week high as rates on similar-maturity Korean notes climbed.

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Asian Market Update : Epic Research Singapore

The global equity bear market deepened in Asian trading, with Japanese stocks headed for their worst week since 2008 as anxiety over central banks' ability to revive the world economy fueled a rally in the yen. Oil rebounded from a 12-year low.

The Topix index slumped 4.4 per cent in Tokyo as traders returned from holiday, pushing the regional Asian benchmark toward its steepest weekly drop since gyrations in Chinese assets at the start of the year. US index futures signaled gains after losses there helped the MSCI All-Country Index cap a 20 per cent slide from its May record. The yen was set for its strongest two-week advance since 1998. US crude rose from a 12-year low.

"We've entered a different phase in the market," said Juichi Wako, a senior strategist at Nomura Holdings Inc in Tokyo. "We're not simply in a risk-off mode, the market's fallen to the point of pricing in a recession in the US."

Japanese Finance Minister Taro Aso said regulators will respond to market volatility if necessary after a move to negative rates failed to assuage anxieties last month.

A stronger yen threatens to imperil the world's third-largest economy through disinflation and lower profits for exporters.

Investors ignored a second day of testimony from Janet Yellen, whose indication that the Federal Reserve won't rush to raise interest rates failed to stem a selloff in riskier assets.

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Asian Market Update : Epic Research Singapore

Asian stock markets tumbled while safe haven assets and oil prices jumped Monday in the first full day's trade of 2016 as a flare-up in tensions between Iran and Saudi Arabia raised concerns about the volatile Middle East.

Saudi Arabia severed diplomatic ties with its old foe Iran Sunday after protesters ransacked its embassy in Tehran in response to the execution of a Shiite cleric.

Riyadh gave Iranian diplomats two days to leave the kingdom, while the supreme leader in Tehran said Saudi Arabia would face "quick consequences" for the execution.

Relations between Sunni-ruled Saudi Arabia and Shiite-ruled Iran have been strained for decades, with Riyadh frequently accusing Tehran of interfering in Arab affairs.

The two countries have also been divided over the nearly five-year war in Syria, where Iran is backing the regime, and the conflict in Yemen where a Saudi-led coalition is battling Shiite rebels.

The developments are the latest to inflame the powder keg region and add to a list of negative news that hurt world markets over the past year, including China's economic malaise, plunging oil prices and anaemic global growth.

"It's going to be a testy start to the week," said Angus Nicholson, a Melbourne-based market strategist at IG Ltd.

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Asian Market Update : Epic Research Singapore

Asian stocks dipped on Monday amid a lack of immediate directional cues in light year-end trade, although Japanese shares managed to rise following a rebound in crude oil prices from multiple-year lows.

Investors across asset markets were without some of the usual leads as markets in Europe and North America and many in Asia were closed on Friday for Christmas.

MSCI's broadest index of Asia-Pacific shares outside Japan gave up earlier modest gains and were last down 0.2 per cent. The index was on track for an 11 percent loss this year.

Shanghai shares scraped out a 0.1 per cent gain on Monday, while Hong Kong's Hang Seng dropped 0.4 per cent. South Korea's KOSPI fell 1 per cent.

Stocks affiliated with Samsung Group fell after the South Korean conglomerate said on Sunday its battery-making arm Samsung SDI will sell shares in sister firm Samsung C&T Corp to comply with regulatory requirements.

Japan's Nikkei rose 0.2 per cent, with soft domestic production and retail data offset by a rebound in crude oil prices. "Disappointing production and retail figures have crushed the chances of any sort of photo-finish for the Nikkei this year," said Martin King, co-managing director at Tyton Capital Advisors. "But oil holding in the high 30s will provide some welcome respite for energy companies at year-end and see the index close out 2015 in 19,000 point territory." The Nikkei, lifted in part by Japanese Prime Minister Shinzo Abe's reflationary policies, was headed for its fourth straight year of gains.

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Asian Market Update : Epic Research Singapore

Asian stocks dropped, with the regional benchmark index retreating from a seven-week high, as Japanese shares slipped after a holiday and investors awaited China's trade data.

The MSCI Asia Pacific Index fell 0.3 per cent to 133.76 as of 9.00 am in Tokyo after closing Monday at the highest since Aug 20. The Standard & Poor's 500 Index rose for a fourth day on Monday as speculation global central bankers will maintain stimulus, at least through the end of the year, underpins a recovery in equities. Data due Tuesday is expected to show ongoing contraction in Chinese exports and imports, potentially reigniting the concerns that fueled last quarter's volatility or stoking bets on further easing.

"The market is trying to digest the recent rally," Shane Oliver, Sydney-based global strategist at AMP Capital Investors Ltd., which manages US$112 billion, said on Bloomberg Television. "The broad picture is still one of ongoing recovery for share markets. We certainly will see more stimulus out of China." Japan's Topix index lost 0.3 per cent. South Korea's Kospi index was little changed. New Zealand's S&P/NZX 50 Index added 0.3 per cent. Australia's S&P/ASX 200 Index slipped 0.2 per cent.

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Asian Market Update : Epic Research Singapore

Asian stocks rose modestly on Thursday, taking their cue from gains on Wall Street as the region braced for a resumption of trading in the Chinese markets after a week-long break.

MSCI's broadest index of Asia-Pacific shares outside Japan tacked on 0.3 per cent, supported by South Korea's Kospi rising 0.5 per cent and Australian shares climbing 0.9 per cent. Japan's Nikkei bucked the trend and lost 0.2 per cent on a stronger yen.

Overnight on Wall Street, the S&P 500 soared to a 3-week high thanks to a bounce in biotechnology companies. Materials shares also enjoyed a positive session on the back of gains for precious metals.

Chinese stock markets, which have been hit by wild swings in recent months due to growth and policy worries, re-open later in the session after shutting since the end of September for holidays. "Arguably, two of the most important developments since China's holiday began is the weakness in the US employment data and, leaving aside the UK, output of the major economies appeared to slow in August," wrote Marc Chandler, global head of currency strategy at Brown Brothers Harriman. "Although many market participants have shifted their expectations of a Fed hike out to March 2016, many Fed officials themselves continue to signal the likelihood of a rate hike before the end of the year." The Fed opted not to hike rates in September in the wake of cooling global growth, and fears of a deepening slowdown in China. Last week's soft non-farm employment report prompted markets to scale back expectations that the Fed would hike rates later this year.

Investors will have an opportunity to gauge the thinking of US central bank officials when the minutes of the Fed's September meeting, at which it opted not to hike rates, are released later in the day.

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Asian Market Update : Epic Research Singapore

Asian stocks climbed, building on their biggest five-day advance in almost four years, as Samsung Electronics Co jumped after quarterly profit topped estimates and investors awaited a Bank of Japan decision on monetary policy.

The MSCI Asia Pacific Index rose 0.2 per cent to 129.23 as of 9:03 am in Tokyo, as Samsung rallied 3.8 per cent to provide the biggest boost to the regional gauge. The company posted third-quarter profit that beat analysts' estimates as the weaker Korean currency boosted component revenue and blunted the impact of price cuts on Galaxy smartphones. Japan's Topix index added 0.2 per cent before BOJ board members and Governor Haruhiko Kuroda decide whether to expand already unprecedented monetary stimulus.

"As chances for additional stimulus are very low, even if stocks rise early on anticipation of easing, they will probably pull back in the afternoon," said Chihiro Ohta, general manager of investment information at SMBC Nikko Securities Inc in Tokyo. "And with Kuroda's press conference coming after the market close, today might be a day of simply waiting for further clues on direction." Thirty-four of 36 analysts forecast that the Japanese central bank willforgo further easing, with just two predicting a move, according to a Bloombergsurvey. Fifteen are forecasting additional stimulus at the next meeting on Oct 30.

Australia's S&P/ASX 200 Index slid 0.4 per cent and New Zealand's S&P/NZX 50 Index was little changed. South Korea's Kospi index rose 0.4 per cent. Mainland Chinese markets remain closed for a holiday, while Hong Kong is yet to open.

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Asian Market Update : Epic Research Singapore

Asian stocks continued where the US left off, heading for their longest run of gains since April as the prospect global central bank policy will remain accommodative for longer bolsters equities around the world.

The regional stock benchmark followed the Standard & Poor's 500 Index in rising a fifth day, as global shares solidify their rebound from their worst quarter since 2011. The dollar maintained losses against major peers, while sliding versus Korea's won amid mounting speculation the Federal Reserve will hold off on raising interest rates until 2016. US oil held above US$46 a barrel.

"Markets continue to believe that weak data will pressure central banks in Europe and Japan to provide more stimulus and will delay the US Fed in its pursuit to begin withdrawing monetary stimulus," Matthew Sherwood, head of investment strategy at Perpetual Ltd in Sydney, which manages about US$21 billion, said in an e-mail to clients. This "continues to have investors believe that asset prices can defy the weak growth environment." Stocks have been rallying since capping their most volatile quarter in four years, as stagnation in the US labour market pushes out the probable timeline for rate increases. Odds the Fed will pull the trigger on tightening this month have fallen to 10 percent, suppressing the dollar while bolstering assets in riskier markets that have benefited from the era of cheaper money. Australia is expected to keep rates at a record-low Tuesday, while the Bank of Japan starts a two-day meeting, with almost half of economists surveyed projecting they'll bolster stimulus at the end of October.

The MSCI Asia Pacific Index climbed 0.9 per cent by 9:55 am in Tokyo, while a similar measure for global stocks added 0.1 per cent in early trade, also rising a fifth day.

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Asian Market Update : Epic Research Singapore

Asian stocks rose early on Monday after prospects of a near-term interest rate hike by the Federal Reserve ebbed in the wake of Friday's weaker-than-expected U.S. employment data.

Data released Friday showed US non-farm payrolls rose by 142,000 in September, considerably lower than the 203,000 jobs the markets had expected.

The lacklustre jobs report, which also showed a stall in US hourly wage growth, fuelled doubts that the world's largest economy was robust enough to withstand a rate hike before year-end.

The possibility of the Fed delaying the lift-off date for rates also meant its loose policy, which has helped shore up risk assets globally by providing cheap cash, would continue a little longer.

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Asian Market Update : Epic Research Singapore

Asian stocks edged up on Thursday as global equities found breathing space after their worst quarter in four years, although caution over China Purchasing Managers' Indexes due later in the session limited gains.

Stocks in Asia took heart from an overnight rally on Wall Street, where the S&P 500 gained 1.3 per cent and the Dow rose 1 per cent as bargain hunters scooped up beaten-down shares.

China's official manufacturing PMI due at 0100 GMT is expected to show factory activity shrank for a second straight month in September. This news will be followed by the final readings of September's Caixin/Markit manufacturing and services PMIs at 0145 GMT. "With the world so sensitive to China's growth prospects, today's manufacturing and services reports could drive sentiment," wrote Chris Weston, chief market strategist at IG in Melbourne.

MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.2 per cent. Australian shares were 0.8 per cent higher. Japan's Nikkei took a lacklustre central bank "tankan" survey on business sentiment in stride and climbed 0.2 per cent.

Chinese financial markets will not have an immediate chance to react to the PMIs as they are closed Oct 1 to Oct 7 for national holidays.

In currencies, the dollar stood tall after an overnight boost from an upbeat US private-sector employment report.

US private employers added 200,000 jobs in September, according to the ADP National Employment Report, beating forecasts and hinting jobs growth may be sufficient for the Federal Reserve to raise interest rates later this year.

In September, the Fed opted against hiking interest rates, citing concerns about global risks and market tumult stemming from China. But in recent days top policymakers including Chair Janet Yellen have said the Fed could hike rates this year if the economy improves.

The euro was little changed at US$1.1172 after shedding 0.6 per cent overnight. The dollar was steady at 119.81 yen after nudging up overnight versus its Japanese counterpart.

The dollar index was flat at 96.266 after rising 0
.2 per cent on Wednesday, with a rise in US Treasury yields in the wake of the bullish jobs report shoring up the greenback.

As with stocks, commodities caught a breather amid the lull in global risk aversion, with copper and nickel rallying as bearish investors closed out quarter-end positions and ahead of the Chinese holidays.

Industrial metals were boosted by a bounce in the shares of hard-hit commodity group Glencore.

Three-month copper on the London Metal Exchange went as high as US$5,192 a tonne, the highest since Sept 22.

Nickel jumped 5.3 per cent overnight to end at US$10,400 a tonne, the strongest since Sept 11.

US crude was up 0.5 per cent at US$45.31 a barrel despite a surge in US crude and gasoline stocks last week, with traders pointing to quarter-end "window dressing" by investors behind the gains.

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Asian Market Update : Epic Research Singapore

Most Asian stock markets steadied on Wednesday after sliding to 3-year lows but a weak outlook for commodities and persistent concerns about China's economy discouraged most buyers.

MSCI's broadest index of Asia-Pacific shares outside Japan was little changed in early trade after plumbing its lowest since June 2012 on Tuesday on fears that China's slowdown would curb its huge appetite for commodities and resources.

The index was on track for a 19 per cent loss for the quarter, its worst loss in four years. "Global equities are closing in on their worst quarter since 2011, with a number of factors fuelling fears in an already jittery market, including weak global growth, driven by deceleration in emerging markets, particularly China," strategists at Barclays wrote. "We recommend overweight positions in Japanese and European equities." South Korea's Kospi dropped 1 per cent while Australian shares gained 0.3 per cent.

Japan's Nikkei brushed aside an unexpected drop in the country's industrial output and gained 1.6 per cent. It was still poised for a 14 per cent drop over the quarter, its deepest since 2010.

Asian stocks took an early positive lead from Wall Street, which ended slightly higher overnight as the US bourses took a breather, with the latest round of China fears that gripped global markets petering out for the moment.

Investors also felt relief as shares of mining and trading giant Glencore gained more than 10 per cent overnight.

Hitting risk sentiment, Glencore shares fell to a record low at the start of the week on concerns over the company's ability to withstand a prolonged decline in prices of metals.

Benchmark three-month copper on the London Metal Exchange rose 0.1 per cent to US$4,970 a tonne, though the rise did not do much to move the metal away from a six-year low of US$4,855 hit in August.

Prices of other industrial metals like aluminium and zinc also halted their recent routs overnight.

Commodities and the global financial markets still face a major test of nerves on Thursday, when the closely-watched Chinese Purchasing Managers' Index (PMI) is likely to show the country's factory sector shrank for the second month in a row in September.

Commodity currencies languished while the US dollar stood tall. The Canadian dollar stood near an 11-year low of C$1.3463 per dollar struck overnight.

South Africa's rand managed to bounce modestly but was still in reach of a record low of 14.16 per dollar touched on Tuesday.

The greenback, meanwhile, stood little changed at 119.86 yen. The euro was steady at US$1.1253.

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Asian Market Update : Epic Research Singapore

Asian stocks fell, with the benchmark index heading for the lowest close since November 2012, as a selloff in US and European markets spread to the region and material shares led losses.

Japan's Topix index lost 2.4 per cent after the yen gained 0.6 per cent against the dollar on Monday. Australia's S&P/ASX 200 Index declined 2.3 per cent and New Zealand's NZX 50 Index fell 0.9 per cent. Markets in South Korea are closed for a holiday and those in China, Hong Kong and India are yet to open. Taiwan's equity market is shut because of a typhoon.

The MSCI Asia Pacific Index retreated 1.4 per cent to 122.96 as of 9:10 am in Tokyo, on course to slide 16 per cent this quarter. The Standard & Poor's 500 Index slumped 2.6 per cent on Monday amid a rout in commodity and biotechnology shares, while a gauge of global equities fell to a two-year low. Glencore Plc slumped 29 per cent, dragging the Bloomberg World Mining Index to its lowest level in almost seven years.

Markets have been whipsawed as China's economy falters despite stimulus efforts. A gauge of industrial profits fell the most in at least four years, a report showed on Monday, ahead of manufacturing data this week that should provide further clues on the health of Asia's largest economy. The spectre of higher interest rates in the US is also weighing on sentiment, with Federal Reserve officials ramping up rhetoric in favor of a 2015 rate increase."The slowdown in China is spreading to other Asian economies, Brazil and Australia, and weakness in emerging countries could echo throughout the overall world economy," said Toshihiko Matsuno, chief strategist at SMBC Friend Securities Co. in Tokyo. "We still don't know when market fears will end about China's slowdown, and because of this investors are turning to cash and safe assets." E-mini futures on the S&P 500 rose 0.2 per cent after the underlying gauge's drop on Monday sent the measure to a one- month low.

Data on Monday showed household spending climbed more than forecast in August, indicating consumers will help the US economy muddle through any global slowdown.

New York Fed president William C Dudley said on Monday that the US economy was "doing pretty well" and that the US central bank will probably raise rates later this year. John Williams, head of the San Francisco Fed, also reiterated his expectation that borrowing costs will be boosted in 2015, adding that the jobless rate will probably fall to below 5 per cent this year.

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Asian Market Update : Epic Research Singapore

Asian stocks sagged on Monday after Wall Street's uninspiring Friday performance and ahead of key economic indicators, while the dollar consolidated its gains against the yen and euro.

MSCI's broadest index of Asia-Pacific shares outside Japan stood virtually flat. Shanghai shares fell 0.3 per cent. Financial markets in South Korea, Hong Kong and Taiwan were closed Monday for public holidays.

Tokyo's Nikkei lost 1.1 per cent on caution ahead of coming announcements including Tuesday's Japan industrial production, Thursday's China Caixin Purchasing Managers' Index (PMI) and US non-farm payrolls on Friday. "Investors would not take large positions until they digest the outcomes of these key data, so directionless trading is expected this week and volume is likely to be thin," said Takuya Takahashi, a strategist at Daiwa Securities in Tokyo. "If these data are better than expected, the market will likely start recovering next week." On Friday, the S&P 500 erased an early Federal Reserve-driven rally and closed slightly lower amid a selloff in biotech shares, and the Nasdaq lost 1 per cent. The Dow, however, managed to rise 0.7 per cent.

Fed Chair Janet Yellen on Thursday revived prospects of an interest rate hike before year-end, easing concerns about slowing global growth that helped the dollar and risk assets, which have been buffeted by fears over China's sputtering economy.

Strong second quarter US GDP data released on Friday further sharpened the case for the Fed to raise rates in 2015.

Focus now turns to this Friday's US non-farm payrolls as the markets try to gauge whether labour market conditions are strong enough for the Fed to tighten monetary policy.

The dollar was little changed at 120.48 yen after edging up to a two-week high of 121.24 on Friday as US Treasury yields rose on the strong US GDP numbers and expectations of a Fed hike in 2015.

The euro was also steady, at US$1.1187 after shedding 0.3 per cent overnight. "In terms of price action, we uphold our view of further dollar outperformance versus the emerging market currencies as risk premia remains elevated on China growth, outflows, and policy opacity concerns," wrote strategists at Barclays. "Compared with developed countries, we expect the dollar to appreciate particularly vis-a-vis the euro, as we think the European Central Bank will have to ease monetary conditions at some point before year-end in order to meet its inflation target." In commodities, the lacklustre mood in equity markets spilled over and US crude oil futures lost 0.6 per cent to US$45.42 a barrel while Brent crude lost 0.9 per cent to US$48.15 a barrel.

Copper edged higher but were still stuck near one-month lows. Three-month copper on the London Metal Exchange had edged up 0.4 per cent to US$5,044.50 a tonne. Prices hit four-week lows on Thursday near the US$5,000-mark and are within reach of a six-year low of US$4,855 reached last month. "The recoveries we've seen over the past couple of months, have been pretty short-lived," said strategist Daniel Hynes of ANZ in Sydney. "It highlights the increasing cautiousness around China's growth and what it means for copper despite what the supply side is doing. The PMI will be pretty key this week." Gold treaded water after being hit by a stronger dollar. Spot gold was little changed at US$1,146.70 an ounce after dropping 0.7 per cent on Friday.

Platinum, drubbed recently on fears demand for the metal used in diesel engines would diminish in the wake of the Volkswagen emissions scandal, dipped 0.1 per cent to US$942.25 an ounce, edging back towards the 6-1/2-year low of US$924.50 an ounce plumbed last week.

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Asian Market Update : Epic Research Singapore

Asian stocks rose after Federal Reserve Chair Janet Yellen said the central bank is on track to raise interest rates this year.

"Most FOMC participants, including myself, currently anticipate that achieving these conditions will likely entail an initial increase in the federal funds rate later this year, followed by a gradual pace of tightening thereafter," Yellen said during a speech Thursday in Massachusetts. "But if the economy surprises us, our judgments about appropriate monetary policy will change." The MSCI Asia Pacific Index added 0.2 per cent to 125.11 as of 9:11 am in Tokyo. The regional benchmark measure has fallen 15 percent since the end of June, on course for its worst quarter in four years, as the Fed prepares to raise rates with financial markets rattled by concern slowing Chinese growth.

"The framework the Fed has provided is a reasonably comforting one," Shane Oliver, global strategist at AMP Capital Investors Ltd, which manages US$112 billion, said by phone. "Of course markets are unusually twitchy at the moment and that's not going to go away any time soon. The Fed will only be raising rates when they're confident growth is on a sustainable track. It's a more positive message."

New Arrows

Japan's Topix index added 1.1 per cent. Prime Minister Shinzo Abe unveiled a new economic growth target Thursday and vowed to halt the nation's population slide. The premier laid out three new "arrows" of his Abenomics plan: a strong economy, increased support for families with children, and social security. The Bank of Japan's main inflation gauge dropped into negative territory, data showed Friday, as weak domestic demand and plunging oil prices wiped out the impact of Governor Haruhiko Kuroda's unprecedented monetary stimulus.

New Zealand's S&P/NZX 50 Index gained 0.3 per cent and Australia's S&P/ASX 200 Index climbed 0.9 per cent. South Korea's Kospi index rose 0.2 per cent.

Slower demand from China, where growth is projected to drop below 7 per cent this year, has helped push down commodity prices, sapping already low inflation in the US. The Fed's preferred measure of prices rose 0.3 per cent in the year through July and has been under its 2 per cent target since April 2008.

Resuming Schedule

Ms Yellen is resuming her planned schedule after feeling unwell toward the end of her speech, Fed spokeswoman Michelle Smith said in an e-mailed statement. The Fed chief felt dehydrated, Ms Smith said.

Futures on Hong Kong's Hang Seng Index lost 1.6 per cent and contracts on the Hang Seng China Enterprises Index of mainland firms listed in the city slid 1.8 per cent in most recent trading.

E-mini futures on the Standard & Poor's 500 Index added 0.4 per cent. The underlying gauge, which closed before Ms Yellen gave her speech, declined 0.3 per cent.

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Asian Market Update : Epic Research Singapore

Asian stocks fell on Wednesday as global growth worries stung Wall Street, sending investors scampering to the relative safety of the yen and government debt.

MSCI's broadest index of Asia-Pacific shares outside Japan slipped 0.3 per cent, with Australia down 1.3 per cent and South Korea falling 0.8 per cent. Japanese markets are shut through Wednesday.

Fresh cracks in the commodities complex, amplified by drops in copper, raised concerns that a China-led slowdown may pose significant headwinds for riskier assets, particularly equities.

Downside risks to global growth have increased and the weak economic outlook will make achieving world development goals more difficult than in the past, the head of the International Monetary Fund said on Tuesday.

Attention will be squarely focused on the China August flash factory PMI survey due to be released at 0145 GMT.

Economists polled by Reuters expect the flash PMI to edge up to 47.5 in September from the final 47.3 in August, but that would still leave it near 6-1/2-year lows and point to a seventh straight monthly contraction in activity.

On Tuesday, the Asian Development Bank lowered its growth forecast for China to 6.8 per cent for 2015.

Overnight on Wall Street, the Dow Jones industrial average fell 1.09 per cent, the S&P 500 lost 1.23 per cent, and the Nasdaq Composite fell 1.5 per cent to 4,756.72.

Losses in equities prompted investors to plough funds into fixed income assets. The benchmark two-year US Treasury yield fell to 0.67 per cent, nearing a two-week low.

In currencies, the US dollar consolidated most of its overnight gains in early Asian trade. It held firm at 96.439 against a basket of six currencies, after earlier rising one per cent. The Japanese yen held firm against the dollar at 120.24 as investors shied away from adding risky bets.

US crude futures rose 0.4 per cent to US$46.51 per barrel, while Brent futures were 0.2 per cent firmer at US$49.18.

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Asian Market Update : Epic Research Singapore

Most Asian stocks rose, following a rebound in US equities. Consumer and material shares led gains.

Four shares climbed for each that fell on the MSCI Asia Pacific Excluding Japan Index, which was little changed as of 8:04 am in Hong Kong. Japanese markets are closed for a holiday. US stocks rose after Fed Bank of Atlanta chief Dennis Lockhart joined Fed presidents from San Francisco, St Louis and Richmond on Monday, saying he remains confident policy will be tightened this year as concern over turmoil in global markets touted by Chair Janet Yellen last week should prove temporary.

"While we may see a moderately positive day for Asian equities following gains in US equities, it's hard to see such gains being sustained amid concerns over Fed policy," said Tim Schroeders, a portfolio manager who helps oversee about US$1 billion in equities at Pengana Capital Ltd. in Melbourne. "The reluctance of the Fed to move from very accommodative policy settings seems to indicate how fragile the US economy can be, especially if you look outside the labor market." With Fed Chair Janet Yellen slated to speak later this week, potentially providing more clarity as to whether to expect a rate increase this year, interest-rate futures indicate traders remain skeptical of a move in 2015. Odds of a hike at the next meeting in October are at 20 per cent, according to fed funds futures, while the probability of an increase at the last meeting of the year, on Dec 16, is 48.8 per cent, down from 58.7 per cent a week ago.

Australia's S&P/ASX 200 Index rose 0.4 per cent. South Korea's Kospi index added 0.2 per cent. New Zealand's S&P/NZX 50 Index climbed 0.1 per cent. Markets in China and Hong Kong have yet to start trading.

The Shanghai Composite Index gained 1.9 per cent on Monday, extending its advance for a second day as President Xi Jinping headed to the US for his first state visit.

Industrial and technology companies rallied on speculation they may see increased orders following Xi's visit, which concludes with a summit with President Barack Obama on Friday. Deals announced before the trip include the first Chinese-made bullet-train project in the US.

E-mini futures on the Standard & Poor's 500 Index were little changed. The US equity benchmark index rose 0.5 per cent on Monday.

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Asian Market Update : Epic Research Singapore

Asian stocks stocks dropped with US equity-index futures and emerging-market currencies as concern that global economic growth spurred investors to sell riskier assets and seek the relative safety of government debt.

Australian shares headed for their biggest retreat in almost a month, dragging the MSCI Asia Pacific excluding Japan Index lower. Standard & Poor's 500 Index contracts signaled a third straight day of losses after Fed members attempted to talk up prospects for an interest-rate increase over the weekend. Copper declined with New Zealand's dollar and emerging-market currencies, while Australian bonds rose a second day. Japanese markets are closed through Wednesday.

"The key thing is that the markets are looking for global growth and we're not seeing any," Raymond Chan, the chief investment officer for Asia Pacific at Allianz Global Investors, which oversees about US$344 billion, told Bloomberg TV in Hong Kong.

"It's the US and China driving sentiment - it's pretty bad. I'd prefer if there was a US rate rise once and for all, and that would clear away all the uncertainty. Volatility is going to continue to exist for a long while."

Three Fed policy makers argued over the weekend that higher borrowing costs are still warranted in 2015, commenting after the central bank decided to stand pat amid global financial- market volatility and concern about the impacts of an apparent economic slowdown in China. Still, global anxiety levels got a boost Friday after a European central banker said the Fed remaining on hold vindicated
their view of the global economy and indicated stimulus could be boosted if needed.

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U.S Market Update : Epic Research Singapore

U.S. stocks whipsawed throughout the day but closed lower on Thursday after the Federal Reserve left interest rates unchanged, and left investors uncertain about the timing of what would be the first rate hike in nearly a decade.

The S&P 500 SPX, -0.26%  rallied to 2,020 during Yellen’s news conference, but erased gains to close 5.11 points, or 0.3%, lower at 1,990.20. Six of the index’s 10 main sectors finished lower. Telecoms got hit, while utilities and health-care stocks led gains.

The regional bank sector didn’t take the news of no interest rate increase well. The SPDR S&P Regional Bank ETF KRE, -2.35%  flipped from a gain of about 0.5% to a loss of 2.4% after Federal Reserve said it was standing pat. Banks benefit from higher rates.

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