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Asian stocks climb amid Fed rate wait

See Kit Tang

Asian stocks advanced on Thursday, as investors eyed gains in oil prices and the positive lead from Wall Street. However, trade volumes could stay light as investors await the Federal Reserve 's policy decision.

The Fed's Federal Open Market Committee (FOMC) will decide whether to raise short-term interest rates for the first time in nine years at its two-day meeting, which began Wednesday. All eyes are on expected statement and press conference due on Thursday afternoon local time.

According to analysts at Mizuho Bank, "market participants are not looking for any policy action... expect substantial moves in asset markets if the Fed surprises with a hike."

Energy counters led the rise on major U.S. indexes overnight, after global crude oil prices surged 5.7 percent overnight. The Dow Jones Industrial Average (Dow Jones Global Indexes: .DJI) finished 0.8 percent higher, with Chevron (NYSE: CVX) leading the index higher. The S&P 500 (CME:Index and Options Market: .INX) rose 0.9 percent to break resistance at 1,993, ending within 5 points of the psychologically key 2,000 level. The tech-heavy Nasdaq Composite (NASDAQ: .IXIC) ended up 0.6 percent.

Mainland indices rebound

China's Shanghai Composite (Shanghai Stock Exchange: .SSEC) index erased early losses to rise 0.5 percent, a day after closing up 4.9 percent on the back of a flurry of buying the final minutes of trade. Analysts who spoke to CNBC said the late-day swing on Wednesday followed the familiar pattern in mainland markets which is typically likened to government intervention .

The benchmark CSI300 Index also rebounded 0.3 percent after breaking a four-day losing streak in the previous session.

Investors may be eyeing new developments in Beijing's stock market probe; Zhang Yujun, the assistant chairman of the China Securities Regulatory Commission (CSRC), is under investigation for " severe violation of discipline ," according to a statement by the country's anti-graft watchdog Central Commission for Discipline Inspection late Wednesday.

Citic Securities (Shanghai Stock Exchange: 30-SZ) plunged 1.7 percent in Shanghai, but its Hong Kong-listed shares bumped up 3 percent, following news from Tuesday that the brokerage's president and two other executives are being probed for suspected insider trading and leaking information.

HK property ahead of Fed

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Nikkei rises 1.1%

The inspiring handover from Wall Street helped Japan's Nikkei 225 (Nihon Kenzai Shinbun: .N225) index to stay on course for a three-day winning streak, brushing off disappointing trade data released before the market open.

Japan's exports rose 3.1 percent in August from a year earlier, down from 7.6 percent in the preceding month and missing expectations for a 4.0 percent annual increase, underscoring concerns about the fragile recovery in the world's third-biggest economy. Imports fell 3.1 percent on-year, wider than the estimate for a 2.2 percent decrease.

This translates into a monthly deficit of 569.7 billion yen (: OSEJPY=) a year earlier, versus Reuters' forecast for a trade deficit of 541.3 billion.

Investors also seem to be ignoring news that ratings agency Standard & Poor's downgraded its credit rating for Japan from AA- to A+ on Wednesday.

Among gainers, heavyweight components Fanuc (Tokyo Stock Exchange: 6954.T-JP) and Fast Retailing (Tokyo Stock Exchange: 9983.T-JP) forged higher 3.5 and 1.7 percent respectively. Shares of Omron Corp (Tokyo Stock Exchange: 6645.T-JP) jumped 4.6 percent after it said it will acquire U.S.-based robot maker Adept Technology (NASDAQ: ADEP).

ASX leaps 1.3%

Australia's S&P ASX 200 (ASX: .AXJO) index touched a one-week high amid a broad-based rally.

The key resources sector took the cues from Wall Street; oil-related plays such as Santos (ASX: STO-AU), Woodside Petroleum (ASX: WPL-AU) and Oil Search (ASX: OSH-AU) climbed more than 2 percent each. Market bellwether BHP Billiton (ASX: BHP-AU) bounced up 2.8 percent, tracking the jump in its U.S. ADRs overnight.

Financials also extended Wednesday's rally, with all four major lenders rising between 0.8 and 1.7 percent.

New Zealand shares edged up 0.6 percent, while the New Zealand dollar (Exchange: USDNZD=) recovered from the impact of below-view growth figures to trade at 0.6372 versus the U.S. dollar.

The country's second quarter gross domestic product (GDP) grew 0.2 percent from the previous three months, unchanged from the first quarter but missing market consensus for a 0.5 percent gain. On a year-on-year basis, the economy expanded 2.4 percent in the April-June period, just shy of the 2.5 percent forecast by Reuters and down slightly from 2.6 percent in the first three months of 2015.

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Kospi flat

South Korea's Kospi index hovered near its highest level since August 18 despite stepping slightly into negative turf late Thursday.

Energy plays got a lift from firmer oil prices overnight; LG Chem (Korea Stock Exchange: 5191-KR) and SK Innovation (Korea Stock Exchange: 9677-KR) charged up 3.6 and 1.5 percent respectively, while SK Hynix (Korea Stock Exchange: 66-KR) and Naver (Korea Stock Exchange: 3542-KR) surged 4 and 5 percent respectively.

However, the bourse's top two weighted stocks Samsung Electronics (Korea Stock Exchange: 593-KR) and Hyundai Motor (Korea Stock Exchange: 538-KR) nursed modest losses, while steelmaker Posco (Korea Stock Exchange: 549-KR) sagged over 2 percent.

JKSE gains 0.8%

The benchmark Jakarta Composite (Jakarta Stock Exchange: .JKSE) advanced ahead of crucial policy decisions from Bank Indonesia (BI) and the Fed. On the other hand, the Indonesian rupiah (Exchange: IDRUSD=) hit a fresh 17-year low of 14,450 against the greenback.

"Given the message that BI cannot run countercyclical monetary policy because more capital outflows would increase government and corporate yields and weaken currency, which is a double whammy for the public finances and some Indonesian corporates, it would be wise for BI to keep the rate unchanged at 7.5 percent," an e-mail note from Natixis said on Thursday.

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