Asian markets drift lower as all eyes turn to the Fed

Asian stocks were mostly lower early Wednesday, taking a lead from declines overnight in the United States. In the absence of further developments on the US-China trade war, investors appear to be shifting their focus to what Federal Reserve Chairman Jerome Powell will have to say Friday at an economic meeting in Jackson Hole, Wyoming.

Japan's Nikkei (N225) dropped 0.3%. Hong Kong's Hang Seng Index (HSI) fell 0.3%. China's Shanghai Composite Index (SHCOMP) edged 0.2% lower. South Korea's Kospi (KOSPI) was up 0.5%.

"There is a definite feeling that markets have entered a holding pattern" ahead of what Powell has to say, wrote Jeffrey Halley, Oanda's senior market analyst for Asia Pacific, in a research note. Investors strongly expect the Fed will cut rates in September. The US central bank will also release minutes Wednesday from its most recent meeting, when the central bank cut rates by a quarter percentage point for the first time since 2008.

Chinese smartphone maker Xiaomi dropped 3.8% in Hong Kong. The company reported late Tuesday that revenue reached 51.95 billion yuan ($7.36 billion) in the second quarter, lower than what analysts expected, according to Refinitiv. The company posted a net profit of 1.95 billion yuan ($277 million) in the quarter — an 87% plunge from a year earlier. The company guided investors to an adjusted profit figure that beat expectations.

Competition in the Chinese smartphone market is especially fierce, and Xiaomi has lost market share to rivals such as Huawei.

Later in the day, India's central bank will release the minutes of its August meeting. The Reserve Bank of India slashed its key lending rate to a nine-year low earlier this month, in a bid to support the faltering economy.

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