Asian Markets Mostly Lower On Fed Decision
Asian stock markets are trading mostly lower on Thursday, following the broadly negative cues from global markets overnight, on renewed concerns over the outlook for interest rates after the US Federal Reserve raised interest rates by 50 basis points and signaled further rate hikes ahead. Asian Markets closed mostly higher on Wednesday.
The Fed expects rates to ultimately be raised higher than forecast back in September. The median forecast suggests rates will be raised to a so-called terminal rate of 5.1 percent next year compared to the September projection of 4.6 percent.
The Australian stock market is modestly lower on Thursday, giving up some of the gains in the previous two sessions, with the benchmark S&P/ASX 200 staying above the 7,200 level, following the broadly negative cues from global markets overnight, as traders reacted to the US Fed’s interest rate decision and the accompanying statement. However, the index pulled back following the release of positive domestic unemployment data.
The benchmark S&P/ASX 200 Index is losing 37.40 points or 0.52 percent to 7,213.90, after hitting a low of 7,202.60 earlier. The broader All Ordinaries Index is down 38.80 points or 0.52 percent to 7,399.90. Australian stocks ended significantly higher on Wednesday.
Among major miners, BHP Group is losing almost 1 percent, Mineral Resources is declining almost 4 percent and Fortescue Metals is edging down 0.5 percent, while Rio Tinto is edging up 0.4 percent. OZ Minerals is flat.
Oil stocks are mostly lower. Woodside Energy and Santos are losing almost 1 percent each, while Origin Energy is down more than 1 percent. Beach energy is gaining almost 1 percent.
In the tech space, Afterpay owner Block and Xero are edging down 0.2 to 0.4 percent, while WiseTech Global is declining more than 2 percent. Appen is edging up 0.4 percent and Zip is flat.
Among the big four banks, Commonwealth Bank, ANZ Banking and Westpac are edging up 0.2 percent each, while National Australia Bank is flat.
Among gold miners, Northern Star Resources and Newcrest Mining are edging down 0.2 to 0.5 percent each, while Gold Road Resources is declining almost 3 percent, Evolution Mining is losing more than 1 percent and Resolute Mining is slipping 2.5 percent.
In economic news, Australia’s unemployment rate came in at a seasonally adjusted 3.4 percent in November, the Australian Bureau of Statistics said on Thursday – unchanged and in line with expectations. The Australian economy added 64,000 jobs last month, blowing away expectations for an increase of 19,000 following the increase of 32,200 jobs in October. There were 34,200 full-time jobs added last month and 29,800 part-time jobs added. The participation rate climbed to 66.8, beating forecasts for 66.6 and up from 66.5 in the previous month.
In the currency market, the Aussie dollar is trading at $0.684 on Thursday.
The Japanese stock market is modestly lower on Thursday, giving up some of the gains in the previous two sessions, with the Nikkei 225 staying above the 28,100 level, following the broadly negative cues from global markets overnight, as traders reacted to the US Fed’s interest rate decision and the accompanying statement.
The benchmark Nikkei 225 Index closed the morning session at 28,081.55, down 74.66 points or 0.27 percent, after hitting a low of 27,987.54 earlier. Japanese stocks closed significantly higher on Wednesday.
Market heavyweight SoftBank Group is edging up 0.3 percent, while Uniqlo operator Fast Retailing is flat. Among automakers, Toyota is flat and Honda is edging down 0.2 percent.
In the tech space, Screen Holdings and Tokyo Electron are edging down 0.2 to 0.4 percent each, while Advantest is edging up 0.4 percent.
In the banking sector, Mitsubishi UFJ Financial, Mizuho Financial and Sumitomo Mitsui Financial are edging up 0.2 to 0.6 percent each.
Among the major exporters, Mitsubishi Electric is losing almost 1 percent, while Sony and Canon are edging down 0.2 to 0.3 percent each. Panasonic is gaining more than 1 percent.
Among the other major losers, there are no other major losers.
Conversely, Hitachi Zosen, IHI Corp., Isetan Mitsukoshi and Kawasaki Heavy Industries are gaining almost 3 percent each.
In economic news, Japan posted a merchandise trade deficit of 2,027.4 billion yen in November, the Ministry of Finance said on Thursday. That missed forecasts for a shortfall of 1,680.3 billion yen following the downwardly revised 2,166.2 billion yen deficit in October (originally -2,162.3 billion yen). Exports jumped 20.0 percent on year to 8.837 trillion yen – beating expectations for a gain of 19.8 percent and slowing from 25.3 percent in the previous month. Imports spiked an annual 30.3 percent to 10.864 trillion yen versus expectations for an increase of 27.0 percent following the 53.5 percent surge a month earlier.
In the currency market, the U.S. dollar is trading in the mid-135 yen-range on Thursday.
Elsewhere in Asia, Hong Kong and South Korea are down 1.7 and 1.1 percent, respectively. China, Singapore, Malaysia, Indonesia and Taiwan are lower by between 0.4 and 0.6 percent each. New Zealand is bucking the trend and is up 0.1 percent.
On Wall Street, stocks saw substantial volatility after a positive start to the day, following the Federal Reserve’s highly anticipated monetary policy announcement on Wednesday. The major averages showed wild swings before eventually closing firmly in negative territory.
The major averages finished the day in the red but off their lows of the session. The Dow fell 142.29 points or 0.4 percent to 33,966.35, the Nasdaq slid 85.93 points or 0.8 percent to 11,170.89 and the S&P 500 dropped 24.33 points or 0.6 percent to 3,995.32.
The major European markets all also moved to the downside on the day. While the German DAX Index dipped by 0.3 percent, the French CAC 40 Index slipped by 0.2 and the U.K.’s FTSE 100 Index edged down by 0.1 percent.
Crude oil prices climbed higher on Wednesday, lifted by an upward revision in demand forecast by the International Energy Agency due to the shutdown of the Keystone pipeline following a massive leak. West Texas Intermediate Crude oil futures for January ended higher by $1.89 or 2.5 percent at $77.28 a barrel.
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