Asian stocks mixed after Wall St falls on Fed rate hike hint
Asian stock markets are mixed after the Federal Reserve indicated it might ease off economic stimulus earlier than previously thought
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.Asian stock markets were mixed Thursday after the Federal Reserve indicated it might ease off economic stimulus earlier than previously thought.
Tokyo fell while Shanghai and Hong Kong gained after Fed policymakers estimated their benchmark rate would rise twice by late 2023, earlier than a previous forecast of no rate hikes before 2024. The Fed also indicated it sees the U.S. economy improving faster than expected.
On Wall Street the benchmark S&P 500 index fell 0.5% on Wednesday after Fed projections showed some of its board members expect short-term interest rates to rise by half a percentage point by late 2023. Ultra-low rates from the Fed and other central banks have propelled a global stock market rebound from last year's plunge amid the coronavirus pandemic.
“The Fed may have delivered a more hawkish message for markets than many would have expected,” Yeap Jun Rong of IG said in a report. Still, Yeap said, differing views among board members suggests “much will still depend on how the economic recovery will play out.”
The Nikkei 225 in Tokyo lost 1.1% to 28,958.46 while the Shanghai Composite Index rose 0.2% to 3,524.31. Hong Kong's Hang Seng added 0.3% to 28,516.97.
The Kospi in Seoul sank 0.4% to 3,264.14 and India's Sensex opened down 0.2% at 52,398.65.
Australia's S&P-ASX 200 shed 0.4% to 7,370.20 after the government reported employment rose by 115,200 in May, up 8.1% from its low a year earlier.
New Zealand and Jakarta declined while Singapore and Bangkok advanced.
The Fed's announcement Wednesday reflected growing confidence in the U.S. economy as more people are vaccinated against the coronavirus and business activity revives.
Investors have worried the Fed and other central banks might feel pressure to withdraw stimulus to cool rising inflation. Fed officials have said they believe inflation will be short-lived, a stance they repeated Wednesday.
Fed chairman Jerome Powell said conditions have improved enough to start discussing when to slow bond purchases. The Fed is buying $120 billion a month to inject money into financial markets and keep longer-term interest rates low.
On Wall Street, the S&P 500 fell to 4,223.70 while the Dow Jones Industrial Average lost 0.8% to 34,033.67. The Nasdaq composite shed 0.2%, to 14,039.68.
In the bond market, the yield on the 10-year Treasury climbed to 1.55% from 1.50% late Tuesday. The two-year yield, which moves more closely with expectations for Fed policy, rose to 0.20% from 0.16%.
In energy markets, benchmark U.S. crude lost 41 cents to $71.74 in electronic trading on the New York Mercantile Exchange. The contract rose 3 cents on Wednesday to $72.15. Brent crude, the price basis for international oils, shed 43 cents to $73.96 per barrel in London. It gained 40 cents the previous session to $74.39.
The dollar gained to 110.67 Japanese yen from Wednesday's 110.50 yen. The euro fell to $1.1999 from $1.2016.