Janet Yellen
Market participants are keen to know how quickly and by how much the US Federal Reserve would tighten its monetary policy Reuters

Asian stock markets were trading mixed on Tuesday (14 March), with the Shanghai Composite down 0.08% at 3,234.41 as of 6.14 am GMT ahead of the US Federal Reserve's two-day meeting.

Market participants are keen on knowing how quickly and by how much the US central bank would tighten its monetary policy, with a majority expecting a March rate increase.

While an increase in rates will translate to higher borrowing costs, analysts say it will not have a negative effect on the current bull run. "Solid US employment growth of 235,000 in February, a fall in unemployment and a slight rise in wages growth keep the Fed on track to raise interest rates again this coming Wednesday."

"However, with US monetary policy a long way from being tight, future rate hikes likely to be gradual and US economic data likely to be solid we don't see it derailing the bull market in shares," Shane Oliver, head of investment strategy at AMP Capital, was quoted as saying by CNBC.

Margaret Yang, market analyst at CMC Market, said the political uncertainty in Europe could affect investor sentiment in Asia. She was referring to the Dutch elections slated for Wednesday and the possibility of Prime Minister Theresa May triggering Article 50 and Scotland holding another independence referendum.

China reported positive industrial output data, up by 6.3% on-year in the first two months of the year, but retail sales growth missed expectations. The mixed picture pushed down equities in the region.

Indices in the region were trading as follows at 6.09am GMT:

Hong KongHang Seng Index23,801.26Down0.12%
JapanNikkei 22519,624.94Down0.04%
South KoreaKOSPI2,133.80Up0.77%
AustraliaS&P/ASX 2005,759.10Up0.03%

On 13 March, the FTSE 100 closed 0.33% higher at 7,367.08 while the S&P 500 index closed 0.03% higher at 2,373.47.

Among commodities, oil prices were trading mixed. As of 2 am EST, WTI crude oil was down 0.04% at $48.38 (£39.80) a barrel, while Brent crude was trading 0.04% higher at $51.37 a barrel.