Hong Kong, July 5
Asian markets were mixed in subdued trade Thursday as investors took to the sidelines following recent gains and waited for a European Central Bank meeting amid expectations of an interest rate cut.
With no lead from the US which had been closed for a holiday, investors waited for the ECB meeting later in the day, as well as for an expected announcement of $78 billion in fresh stimulus cash from the Bank of England.
The euro held steady against the dollar in cautious trade.
Tokyo closed 0.27 percent, or 24.37 points, lower at 9,079.80, and Seoul was flat, rising 0.06 percent, or 1.04 points, to close at 1,875.49.
Hong Kong closed 0.50 percent, or 99.38 points, higher at 19,809.13, but Shanghai slipped 1.17 percent, or 25.97 points, to end at 2,201.35 amid continued concerns about China’s slowing economic growth.
Sydney was flat, giving up 0.07 percent, or 3.0 points, to close at 4,169.2.
Herald van der Linde, head of equity strategy Asia-Pacific at HSBC in Hong Kong, told Dow Jones Newswires markets were "taking a bit of a breather" after gains on last week’s EU summit deal to help the eurozone.
He added the ECB’s expected rate cut was not affecting regional bourses as "the market has already priced in a cut".
Investors were also holding back ahead of key jobs data in the US to be released on Friday, betting the figures will be poor and may push the US Federal Reserve towards a new round of quantitative easing, dealers said.
The ECB is widely expected to trim eurozone borrowing costs later Thursday by a quarter of a percentage point to a new record low of 0.75 percent, central bank watchers predicted.
It is hoped the move will build on the progress made by European leaders last week, whose surprise agreement to help the embattled single currency has lifted markets.
The leaders agreed emergency measures, which included using rescue funds to directly recapitalise ailing banks as well as $150 billion in new stimulus, to help the eurozone whose debt crisis is threatening the world economy.
But with the rate cut now factored in, some analysts argued there could be disappointment without additional measures from the bank, such as the resumption of its bond-buying programme which has lain dormant for 16 weeks.
"We expect the ECB to cut its main interest rate by 25 basis points to 0.75 percent," said Berenberg Bank economist Christian Schulz, warning that such a move alone "would probably disappoint markets".
European stock markets were little changed on Wednesday, and opened flat on Thursday as investors awaited the ECB and BoE decisions.