TOKYO – Shares were trading slightly higher in Asia on Wednesday after a weekslong rally on Wall Street hit the brakes.
Markets rose Wednesday in Tokyo, Hong Kong and Sydney but fell in Shanghai after the S&P 500 fell 0.8%, its largest loss in almost three weeks.
Skeptics have been saying for weeks that the rally may have been overdone. Stocks have soared much more quickly than many economies are expected to, and surging numbers of infections in many countries show the pandemic is far from over.
Investors are awaiting a meeting of the Federal Reserve later in the day for signals on the future of stimulus for the U.S. economy.
The Fed’s promise of immense, unprecedented amounts of aid helped launch the recent rally, and investors want to see the central bank's reaction to a recent upturn in jobs numbers.
With the trajectory of infections still uncertain, “the primary question remains, has the market’s recovery bought the Fed some time not to use all its bullets, or will they keep the pedal to the metal?" Stephen Innes of AxiCorp said in a commentary.
Japan's Nikkei 225 index edged 0.1% higher to 23,115.22 after the government reported a sharp drop in machinery orders in April. South Korea's Kospi rose 0.2% to 2,193.33, while the Hang Seng in Hong Kong also gained 0.2%, to 25,096.14.
Sydney's S&P/ASX 200 added 0.4% to 6,166.50.