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Asia: Shares mostly higher, euro steady as Fed meets

[SYDNEY] Asian share markets were mostly firmer on Tuesday and the euro clung to rare gains, relieved that European equities had weathered Greece's election outcome without much disruption.

Bad weather in the United States curbed activity on Wall Street in a busy week for earnings, while investors had reason for caution as the Federal Reserve holds its first policy meeting of the year.

Japan's Nikkei gained 1.4 per cent, while Australia's main index added 0.5 per cent. Moves were mostly modest and MSCI's broadest index of Asia-Pacific shares outside Japan was flat on the day.

China went its own way and the Shanghai index slipped 0.5 per cent.

On Wall Street, the Dow had ended Monday up a bare 0.03 per cent, while the S&P 500 gained 0.26 per cent and the Nasdaq 0.29 per cent.

A blizzard engulfing New York is expected to keep many investment banks and fund managers on skeleton staff, though the main exchanges all plan to open as usual on Tuesday.

Around 30 per cent of S&P500 companies report earnings this week, including tech heavyweights Microsoft, Apple, and Google.

Of the 96 companies that have reported so far, 66 have topped forecasts, 18 disappointed and 12 were in line with estimates.

The US Federal Reserve starts a two-day policy meeting on Tuesday and investors are keen to hear its take on the rash of policy easings from the euro zone to Canada and Switzerland.

The general assumption is the Fed will acknowledge the uncertain global outlook and stick to its promise to be patient on tightening. Yet its timetable remains for lift-off on rates by mid-year, a trajectory that presages further broad-based gains for the dollar.

The dollar was near an 11-year peak against a basket of major currencies at 94.909 having risen 11 per cent in only the past three months.

It softened a shade on the yen to 118.22 yen, while the euro pared a little of its recent heavy losses to stand at US$1.1245.

The Fed is hardly alone in meeting this week, with policy decisions awaited from Hungary, Thailand, Malaysia, New Zealand, South Africa, Mexico, Colombia and Russia.

In Europe, Greek left-wing leader Alexis Tsipras was sworn in on Monday as the prime minister of a new hardline, anti-bailout government determined to face down international lenders and end nearly five years of austerity.

Tsipras quickly sealed a coalition deal with the Independent Greeks party which also opposes Greece's EU/IMF aid programme.

The initial reaction in markets was modest by recent standards. Greek stocks fell 3 per cent, led lower by bank stocks including Piraeus Bank which fell 17.6 per cent. Greek 10-year bond yields rose, but stayed below the levels seen in the run-up to the vote.

The FTSEurofirst 300 index of top European shares ended 0.13 per cent higher and close to a seven-year high.

In commodity markets, US crude was quoted 10 cents firmer at US$45.25. Brent edged up 12 cents to US$48.28, but that followed a 1.3 per cent drop on Monday.

REUTERS