Asian Markets Track Wall Street Sell-off

Asian stock markets are trading mostly lower on Thursday, following the broadly negative cues from Wall Street overnight, after the US Fed raised interest rates by another three-quarter of a percentage point to their highest level since early 2008 and signaled further aggressive rate hikes for the remainder of the year. Asian Markets closed mostly lower on Wednesday.

With inflation remaining elevated, the Fed also said it expects that ongoing interest rate increases will be appropriate. Fed officials expect to increase rates to 4.6 percent by the end of 2023 before eventually scaling back rates in 2024 and 2025.

In his post-meeting press conference, Fed Chair Jerome Powell reiterated the central bank’s strong resolve to bring inflation down to 2 percent, pledging to “keep at it until the job is done.”

Caution also prevailed ahead of the Bank of Japan and Bank of England meetings.

The Australian stock market is closed for National Mourning Day on Thursday. Australian stocks ended sharply lower on Wednesday.

In the currency market, the Aussie dollar is trading at $0.659 on Thursday.

The Japanese stock market is significantly lower in choppy trading on Thursday, extending the losses in the previous session, with the Nikkei 225 just floating a tad above the 27,000 mark, following the broadly negative cues from Wall Street overnight, with weakness across most sectors as traders digest another rate hike by the US Fed and the hawkish comments by Fed Chair Jerome Powell.

The Fed raised interest rates by another three-quarter of a percentage point and signaled further aggressive rate hikes for the remainder of the year.

Meanwhile, the Bank of Japan held its benchmark short-term lending rate unchanged at -0.1 percent as widely expected following its monetary policy meeting today.

The benchmark Nikkei 225 Index closed the morning session at 27,047.37, down 265.76 points or 0.97 percent, after hitting a low of 26,955.18 earlier. Japanese stocks closed sharply lower on Wednesday.

Market heavyweight SoftBank Group is losing almost 3 percent and Uniqlo operator Fast Retailing is down 1.5 percent. Among automakers, Honda is losing almost 1 percent, while Toyota is edging up 0.1 percent.

In the tech space, Screen Holdings is losing almost 2 percent, Tokyo Electron is down more than 1 percent and Advantest is declining almost 2 percent.

In the banking sector, Mitsubishi UFJ Financial is losing more than 1 percent, Mizuho Financial is down almost 1 percent and Sumitomo Mitsui Financial is edging down 0.1 percent.

Among the major exporters, Canon is losing almost 1 percent, Sony is declining almost 2 percent, Mitsubishi Electric is edging down 0.4 percent and Panasonic is down more than 1 percent.

Among the other major losers, Toho Zinc is losing more than 4 percent and Kawasaki Kisen Kaisha is down more than 3 percent, while Recruit Holdings, Alps Alpine and Mitsui O.S.K. Lines are declining almost 3 percent each.

Conversely, there are no major gainers.

In the currency market, the U.S. dollar is trading in the higher 144 yen-range on Thursday.

Elsewhere in Asia, Hong Kong is slipping 1.5 percent, while Taiwan and South Korea are down 1.1 percent each. Singapore and Malaysia are lower 0.3 percent each.New Zealand is bucking the trend and is up 0.1 percent. Indonesia and China are relatively flat.

On Wall Street, stocks typically saw wild swings following the Federal Reserve’s monetary policy announcements but saw particularly significant volatility on the heels of the central bank’s latest decision on Wednesday.

The major averages swung back and forth across the unchanged line before finishing the day just off their lows of the session. The Dow slumped 522.45 points or 1.7 percent to 30,183.78, the Nasdaq plunged 204.86 points or 1.8 percent to 11,220.19 and the S&P 500 tumbled 66.00 points or 1.7 percent to 3,789.93.

Meanwhile, the major European markets moved to the upside on the day. While the French CAC 40 Index advanced by 0.9 percent, the German DAX Index climbed by 0.8 percent and the U.K.’s FTSE 100 Index rose by 0.6 percent.

Crude oil prices drifted lower Wednesday amid concerns about the outlook for energy demand after the Federal Reserve’s announcement of a sharp hike in interest rates raised fears about a recession. West Texas Intermediate Crude oil futures for November ended lower by $1.00 or 1.2 percent at $82.94 a barrel.

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