Asian markets mixed after US fed hikes rates again

Asian markets mixed after US fed hikes rates again

Asian markets were mixed Thursday after a decision by the Fed to raise interest rates yet again
Asian markets were mixed Thursday after a decision by the Fed to raise interest rates yet again. Photo: SAUL LOEB / AFP
Source: AFP

PAY ATTENTION: Celebrate South African innovators, leaders and trailblazers with us! Click to check out Women of Wonder 2022 by Briefly News!

Asian markets were mixed in early trade on Thursday, after the Federal Reserve soured the mood on Wall Street by not only raising rates but also indicating that it would not cut them any time soon.

All three major US indices declined along with the dollar after the Fed's latest hike, while recession worries drove US oil prices below $70 a barrel, where they remained on Thursday.

Hong Kong, however, bucked the slide on Wall Street to post solid morning gains of around one percent, driven by commerce and industry stocks.

Chinese shares got off to a shaky post-holiday start with early losses on the CSI 300, though the index managed to claw its way back into the green by late morning.

Sydney, Seoul, Wellington and Singapore were down, while Taipei, Jakarta and Manila were up.

Read also

ECB expected to slow pace of rate hikes

Following an up day on European bourses, US stocks initially rose after the Fed hinted that Wednesday's rate hike could be its last.

PAY ATTENTION: Follow us on Instagram - get the most important news directly in your favourite app!

But after veering in and out of positive territory, shares fell decisively once Fed Chair Jerome Powell ruled out rate cuts in 2023.

The attention now shifts to Thursday's meeting of the European Central Bank, which is expected to deliver another rate increase of its own.

Oil, meanwhile, was still down on Thursday after taking a hit over worries about weaker demand due to an economic slowdown.

US benchmark WTI was trading below $69 a barrel after hitting its lowest price since OPEC+ cut output a month ago.

'Bad news' for crude

Oanda's Edward Moya said in a note that the Fed's decision to press pause on further rate hikes signalled it was becoming more worried about economic activity, which was "bad news" for the crude outlook.

Read also

US Fed likely to hike rates again as banking fears resurface

"The focus will shift to OPEC+ and they might be in a position where if they want to stabilize prices, they need to deliver on previously announced production cuts and signal that more are coming," he said.

Also on investors' minds were fears that Democrats and Republicans might fail to strike a deal on raising the US debt ceiling, triggering a damaging default as early as June 1.

The White House warned Wednesday that if the US government stopped meeting its financial obligations, the resulting economic shocks could cause a six percent drop in GDP and a 45 percent stock market drop.

Meanwhile, shares of regional US lenders remained under pressure as fears swirled about the health of the banking sector.

SPI Asset Management's Stephen Innes said in a note that "even as the Fed gently taps the pause button, it's been disappointing for stocks as index investors are caught up on the messy debt ceiling and regional banking backwash".

Read also

Asian stocks down after Wall Street losses

"Looking at the markets today, investors appear to be assuming a more defensive approach, with traditionally 'safe' asset classes like Gold and bonds moving higher and oil precipitously lower," he added.

Key figures around 0300 GMT

Hong Kong - Hang Seng Index: UP 1.0 percent at 19,895.49

Shanghai - Composite: UP 0.4 percent at 3,334.78

Tokyo - Nikkei 225: Closed for holiday

Euro/dollar: UP at $1.1083 from $1.1062 Wednesday

Pound/dollar: UP at $1.2588 from $1.2562

Dollar/yen: DOWN at 134.49 yen from 134.99 yen

Euro/pound: UP at 88.06 pence from 88.03 pence

West Texas Intermediate: FLAT at $68.61 per barrel

Brent North Sea crude: UP 0.3 percent at $72.51 per barrel

New York - Dow: DOWN 0.8 percent at 33,414.24 (close)

London - FTSE 100: UP 0.2 percent at 7,788.37 (close)

PAY ATTENTION: Сheck out news that is picked exactly for YOU ➡️ click on “Recommended for you” and enjoy!

Source: AFP

Authors:
AFP avatar

AFP AFP text, photo, graphic, audio or video material shall not be published, broadcast, rewritten for broadcast or publication or redistributed directly or indirectly in any medium. AFP news material may not be stored in whole or in part in a computer or otherwise except for personal and non-commercial use. AFP will not be held liable for any delays, inaccuracies, errors or omissions in any AFP news material or in transmission or delivery of all or any part thereof or for any damages whatsoever. As a newswire service, AFP does not obtain releases from subjects, individuals, groups or entities contained in its photographs, videos, graphics or quoted in its texts. Further, no clearance is obtained from the owners of any trademarks or copyrighted materials whose marks and materials are included in AFP material. Therefore you will be solely responsible for obtaining any and all necessary releases from whatever individuals and/or entities necessary for any uses of AFP material.