HONG KONG — Asian markets were mixed in cautious trade Tuesday as investors awaited an interest rate decision from the U.S. Federal Reserve.
The U.S. central bank is widely anticipated to slash its key rate by at least a half point, to 0.5 percent, following repeated cuts since the financial crisis erupted last year. However, what the Fed says in its accompanying statement on the health of the world's largest economy, already in recession, will likely have a bigger impact on the markets.
A host of earnings reports this week was also cause for investor anxiety, analysts said. Goldman Sachs Group Inc. is expected Tuesday to report its first quarterly loss since it went public in 1999 as a result of the global financial turmoil. Morgan Stanley reports results on Wednesday.
"The possible cutting of interest rates will help in the short term, but there are too many uncertainties out there," said Peter Lai, investment manager at DBS Vickers in Hong Kong. "We're in a recession ... and people are wondering if other companies may need rescues."
Japan's Nikkei 225 stock average fell 96.64 points, or 1.1 percent, to 8,568.02, but Hong Kong's Hang Seng edged up 0.2 percent to 15,082.04 and South Korea's Kospi was up 0.3 percent.
Benchmarks in Australia and mainland China fell by about 1 percent or more.
Hong Kong stocks were buoyed by speculation that China might deliver a rate cuts of its own after the Fed's move, analysts said. Beijing, increasingly worried about slowing growth, has rolled out a series of measures in recent months in hopes of boosting domestic spending to shield the Chinese economy from the global downturn.
Overnight in New York, U.S. stocks fell back amid investor concerns about the $50 billion fraudulent investment scheme led investment manager Bernard Madoff.
The Dow Jones industrial average finished down 65.15, or 0.75 percent, to 8,564.53. The Standard & Poor's 500 index lost 11.16, or 1.27 percent, to 868.57. European markets also closed lower.
U.S. stock index futures pointed to another drop Tuesday. Dow futures were down 13 points, or 0.15 percent, to 8,591, while S&P futures were down 2.2 points, or 0.25 percent, to 870.10.
In currencies, the dollar was little changed at 90.50 yen. The euro was higher at $1.3723, after peaking in late New York trading at $1.3722, its highest point since Oct. 14.
Oil prices were little changed, trading down 6 cents to $44.45 a barrel in electronic trading on the New York Mercantile Exchange by midday in Singapore. The contract fell overnight $1.77 to settle at $44.51.