HONG KONG (Nikkei Markets) -- Asian shares fell Wednesday ahead of the Federal Reserve's policy decision even as lingering uncertainty over U.S.-China trade negotiations damped investor appetite.
The Nikkei Asia300 Index of companies outside Japan slipped 0.1% to 1,330.36.
The decline in Asian equities came after a rally on Wall Street came unstuck amid a report by Bloomberg that U.S. officials were worried that China was pushing back against American trade demands. The report, citing people familiar with the negotiations, said that Chinese officials shifted their stance because they had not received assurances from the Donald Trump administration that tariffs imposed on Chinese shipments would be lifted after agreeing to changes to the intellectual-property policies. Beijing had further stepped back from its initial promises over data protection of pharmaceuticals and refused to give ground on data-service issue, the report added.
Michael McCarthy, the chief market strategist at CMC Markets and Stockbroking, said that the "trade rumbles" were stirring caution, with reports of trade tensions contradicting White House assertions that talks with China were going well.
"Sensitivity to any news on trade is heightened by a lack of major data releases," he said. "Although less likely, any decision by authorities in China to take this discussion (highlighting hurdles to a trade agreement) public could rattle markets."
The S&P 500 Index ended little changed on Tuesday.
Meanwhile, the Fed later Wednesday is expected to leave interest rates unchanged and trim its projections for future rate increases. Economists expect the U.S. central bank to cut its projections for rate increases to one from two forecast in December. The Fed is further expected to formally announce that it will halt its bond holding reduction program.
"We expect the Fed to stay on hold and deliver another dovish message through the statement and revisions to the forecasts," Bank of America Merrill Lynch said in a note. "The dots should show a shallower path of rates (1 in 2019 and 1 in 2020). We see some risk of a more dovish path."
In major losers on the A300 index on Wednesday, Hong Kong-shares of China Overseas Land & Investment fell 2% despite reporting 10.1% increase in net profit for 2018.
China Resources Beer climbed 1.7%. The company's 2018 net profit fell 16.9% on year amid higher selling and distribution expenses.
Samsung Electronics closed 0.3% higher after falling 1.8% earlier. Reuters cited the South Korean company's CEO as saying that that he expects stagnant growth amid slowing global economic growth and long replacement cycle in 2019 smartphone market.
HCL Technologies closed 0.4% higher. The Indian software exporter said late Tuesday that it had signed a seven-year agreement with U.S.-based Xerox to manage a part of its shared services.