BEIJING (AP) – Asian stock markets were mixed on Thursday after the Federal Reserve said it may ease the economic stimulus sooner than expected.
Tokyo fell as Shanghai and Hong Kong gained after Fed policymakers estimated their benchmark rate would rise twice by the end of 2023, earlier than a previous forecast of no rate hike before. 2024. The Fed has also indicated that it sees the US economy improving faster than expected.
On Wall Street, the benchmark S&P 500 fell 0.5% on Wednesday after the Fed’s projections showed some members of its board of directors expected interest rates to rise in the near future. term to half a percentage point by the end of 2023. Ultra-low rates from the Fed and other central banks have propelled a rebound in the global stock market after last year’s plummet in the middle of the coronavirus pandemic.
“The Fed may have delivered a more hawkish message to the markets than many might have imagined,” IG’s Yeap Jun Rong said in a report. Yet, Yeap said, the divergent views among board members suggest that “a lot will always depend on how the economic recovery plays 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 lost 0.4% to 3,264.14 and the Indian Sensex opened down 0.2% to 52,398.65.
Australia’s S & P-ASX 200 fell 0.4% to 7,370.20 after the government announced employment rose 115,200 in May, up 8.1% from its low in May. last year.
New Zealand and Jakarta retreated while Singapore and Bangkok advanced.
The Fed’s announcement on Wednesday reflected growing confidence in the U.S. economy as more people are vaccinated against the coronavirus and business activity resumes.
Investors fear the Fed and other central banks are under pressure to withdraw stimulus measures to curb rising inflation. Fed officials said they believe inflation will be short-lived, a position they repeated on Wednesday.
Fed Chairman Jerome Powell said conditions have improved enough to start discussing when to slow down bond buying. The Fed buys $ 120 billion a month to pump money into financial markets and keep long-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 lost 0.2% to 14,039.68.
In the bond market, the 10-year Treasury yield climbed to 1.55% from 1.50% on Tuesday night. The two-year yield, which moves more closely with Fed policy expectations, fell from 0.16% to 0.20%.
In energy markets, benchmark US 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 basis of international oil prices, fell 43 cents to $ 73.96 a barrel in London. It gained 40 cents the previous session at $ 74.39.
The dollar gained 110.67 Japanese yen against 110.50 yen on Wednesday. The euro fell to $ 1.1999 from $ 1.2016.