Asia stocks muted ahead of US retail data

Asian stocks flatten out ahead of US retail sales data as worries ease of US strike on Syria

Associated Press

MUMBAI, India (AP) -- Asian stock markets were muted Thursday as investors kept their guard up ahead of the release of U.S. retail sales data and next week's Federal Reserve policy meeting.

The likelihood that the Fed will start to reduce its huge monetary stimulus program has shaken markets in recent weeks. Fed officials have strongly hinted that the U.S. central bank plans to wind down its $85 billion in monthly bond purchases as the economy improves.

The asset purchases are widely credited with holding down interest rates and breathing life into stock markets, and the investment terrain will likely endure a shakeup if and when the Fed announces a "tapering" of asset purchases. That could take place as soon as next week's meeting.

The retail sales data for August, which the U.S. Commerce Department will release Friday, will help traders evaluate the likelihood of such an announcement by the Fed.

Hong Kong's Hang Seng was nearly unchanged at 22,932.21. South Korea's Kospi was also nearly flat at 2,004.06. Japan's Nikkei 225 index, the regional heavyweight, fell 0.3 percent to 14,387.27, dragged down by a firmer yen.

But mainland China's Shanghai Composite Index rose 0.5 percent to 2,253.16, as investors cheered Chinese industrial numbers released Tuesday, plus a speech by Premier Li Keqiang promising to open markets to private competition, analysts said

"Any sort of doomsday scenario that China is going to see falling GDP growth has been squashed for the time being," said Samuel Le Cornu, portfolio manager at Macquarie Funds Group in Hong Kong.

India's Sensex also dropped by 0.7 percent to 19,852.68 in a sell-off after strong rallies over past days in response to new central bank proposals to strengthen the rupee. Benchmarks in Indonesia and the Philippines also fell. Those in Taiwan, Thailand and Singapore rose.

Worldwide, markets have been boosted in recent days by diplomatic efforts to get Syria to turn over its stockpile of chemical weapons, easing fears that the U.S. would launch an attack. Washington has threatened to retaliate against Syrian President Bashar Assad for allegedly using chemical weapons against civilians outside Damascus last month.

President Barack Obama contends that chemical attacks pose a potential threat to the global community and retaliation is necessary. But he has so far faced an uphill battle trying to convince congressional leaders and U.S. allies to go along.

On Wall Street, stocks mostly rose Wednesday as investors continued to bet that a U.S.-Syria military conflict may not happen. The Standard & Poor's 500 index posted its seventh gain in a row after starting the day with a loss. The Nasdaq composite posted a small loss. Both indexes were held back by a decline in shares of Apple and other tech companies.

The Dow Jones industrial average rose 0.9 percent to close at 15,326.60. The Standard & Poor's 500 index rose 0.3 percent, to 1,689.13. The Nasdaq composite fell 0.1 percent, to 3,725.01.

Benchmark oil for October delivery rose 8 cents to $107.64 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose 17 cents to close at $107.56 a barrel on the Nymex on Wednesday.

In currencies, the euro fell $1.3303 from $1.3312 late Wednesday. The dollar fell to 99.42 yen from 99.87 yen.

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