Cautious trading ahead of Jackson Hole

MINUTES from the US Federal Reserve's meeting in July may have cast a pall on sentiment from those expecting the US central bank to be outwardly dovish - but its effect was limited in the local market. The Straits Times Index (STI) managed to clock in modest gains to end at 3,127.74, up 5.17 points or 0.2 per cent. It was mixed elsewhere in the Asia-Pacific. Markets in Australia, China, Japan and Malaysia were up, while Hong Kong and South Korea finished lower. Hong Kong's Hang Seng fell 221.32 points or 0.8 per cent as worries remain over the territory's economy after weeks of protests.

VM Markets managing director Stephen Innes observed that the mood in Asian markets was "very capricious" with a "decidedly risk-off note". "This FOMC (Federal Open Market Committee) division is well documented, and while nothing new, it acts as a not-so- subtle reminder of how challenging it could be for chair (Jerome) Powell to meet the market's exceedingly dovish expectations," he added.

After all, the performance of the US economy has continued to be encouraging as evidenced by resilient growth despite global economic headwinds and trade tensions between Washington and Beijing.