Asian Markets Mixed on Fed Speak and Carl Icahn's Comments

Asian markets witnessed mixed trade on 19 November, after a downbeat handover from Wall Street, as investors exercised caution amid US stimulus taper concerns.

The Shanghai Composite finished 0.19% lower or 4.09 points at 2,193.12.

South Korea's Kospi finished 1.04% higher or 20.83 points at 2,031.64.

The Japanese Nikkei finished 0.25% lower or 37.74 points at 15,126.56.

Australia's S&P/ASX finished 0.59% lower or 31.80 points at 5,352.90.

Hong Kong's Hang Seng was trading 0.20% higher or 47.87 points at 23,707.93.

India's BSE Sensex was trading 0.21% higher or 44.05 points at 20,894.79.

William Dudley, the president of the New York Federal Reserve and an ardent supporter of easy-money policies said on 18 November that he was "getting more hopeful" about the prospect of a stronger US economic recovery.

The Fed has always maintained that it could trim its $85bn-a-month bond buying stimulus when the US economy improves, as officials expect it to. The central bank will announce its monetary policy decision on 18 December.

"Not only do we have some better data in hand, but also the fiscal drag, which has been holding the economy back, is likely to abate considerably over the next few years at the same time that the fundamental underpinnings of the economy are improving," Dudley told a gathering at City University New York.

Meanwhile, US equities declined on 18 November after activist investor Carl Icahn said he is "very cautious" on the stock market.

Speaking at a Reuters investment conclave, Icahn said he anticipated a bid drop in the markets because corporate earnings were being boosted by low borrowing costs rather than the strength of the management.

Tim Radford, Global Analyst at Rivkin Securities said in a note to clients: "Everyone thinks US stocks are in a bubble, driven by the expanding balance sheet of the US Federal Reserve. From a short-term perspective, the rally in US equities has likely gotten ahead of itself on a fundamental and technical basis. And with the emergence of selling resistance at obvious round numbers on the Dow Jones Industrial Average and S&P 500 Index at 1,800 and 16,000, an interim top is likely in place, leading to lower prices over the next few sessions."

"Ongoing talks of a bubble developing in US equities is clearly scaring market participants out of the market given equities continue pushing to fresh all-time highs. Many investors, with the GFC still fresh on their mind, don't want to buy into this rally out of fear of buying at the top. Although there is growing evidence a market bubble is brewing, the existence of scepticism and doubt about the current bull market is actually more bullish in nature. It must be remembered that although stocks are at all-time highs and are fairly valued based on historic trailing earnings, equities have, until recently, essentially gone nowhere over the past 15 years," according to Radford.

"So in the short-term stocks look overbought and we expect some form of a pullback, but from a longer-term perspective, there still seems plenty of room left in the post GFC bull market," he added.

Wall Street Down

On Wall Street, most indices ended lower on 18 November following Icahn's remarks.

The Dow finished 14.32 points higher or 0.1% at 15,976.02, its fourth straight closing high.

The S&P 500 closed 6.65 points lower or 0.4% at 1,791.53.

The Nasdaq ended 36.9 points lower or 0.9% at 3,949.07.

Company Stock Movements

In Tokyo, semiconductor maker Tokyo Electron lost 3.3%.

In Hong Kong, China Life Insurance shot up 4.6% while China Merchants Bank added 1.7%.

In Shanghai, Merchants Bank and China Merchants lost over 2% each.

In Mumbai, Jet Airways added 3% after Tail Winds, a private investment unit owned by the carrier's promoter and chairman Naresh Goyal, sold 7.9% of his 75% stake in Jet for some 2.10bn rupees ($33.6m).

In Sydney, Commonwealth Property Office Fund (CPA) shot up 4.2% after a bidding war broke out for the Australian Real Estate Investment Trust(A-REIT). CPA received a $2.8bn buyout offer from property investor GMT Group.

In Seoul Ssangyong Motor and Kia Motors gained 3% each while larger rival Hyundai Motor moved up 2%.