Asian Markets Mixed After Fed Rate Hike

Asian stock markets are mixed on Thursday after the U.S. Federal Reserve raised interest rates by 25 basis points as widely anticipated and projected one more rate hike by the end of the year.

This is the Fed’s third rate hike in 2018. In his subsequent press conference, Fed Chairman Jerome Powell said it is not in the central bank’s forecasts to see inflation surprise to the upside.

The Australian market is flat after opening lower following the negative lead from Wall Street after the Federal Reserve hiked interest rates. Weak commodity prices weighed on resources stocks.

In late-morning trades, the benchmark S&P/ASX 200 Index is adding 1.70 points or 0.03 percent to 6,194.00, after falling to a low of 6,179.80 in early trades. The broader All Ordinaries Index is rising 3.00 points or 0.05 percent to 6,310.80. Australian shares closed slightly higher on Wednesday.

In the mining space, BHP Billiton is down 0.3 percent, Rio Tinto is declining almost 1 percent and Fortescue Metals is losing more than 1 percent after copper and iron ore prices fell.

Among gold miners, Evolution Mining is lower by 0.7 percent and Newcrest Mining is down 1 percent after gold prices also declined overnight.

Oil stocks are also mostly weak after crude oil prices dropped about 1 percent overnight. Oil Search is lower by more than 1 percent and Woodside Petroleum is declining almost 1 percent, while Santos is rising almost 1 percent.

In the banking space, ANZ Banking is down 0.2 percent and Westpac is edging down 0.1 percent, while Commonwealth Bank is rising 0.3 percent.

Law firm Slater and Gordon said it has filed a class action suit against National Australia Bank over the sale of credit card insurance to card holders who were ineligible to claim the benefits under the insurance policy. Shares of National Australia Bank are declining 0.2 percent.

In economic news, Australia will see August numbers for job vacancies today.

In the currency market, the Australian dollar is flat against the U.S. dollar on Thursday. The local currency was quoted at $0.7260, compared to $0.7261 on Wednesday.

The Japanese market is modestly higher after opening lower on profit taking following the weak cues from Wall Street after the Federal Reserve raised interest rates.

The benchmark Nikkei 225 Index is adding 25.03 points or 0.10 percent to 24,058.82, after touching a low of 23,920.55 in early trades. Japanese shares extended gains for an eighth consecutive session on Wednesday.

The major exporters are mixed on a stronger yen. Panasonic is declining 0.4 percent and Canon is down 0.3 percent, while Sony is adding 0.3 percent and Mitsubishi Electric is edging higher by 0.1 percent.

In the banking sector, Mitsubishi UFJ Financial is losing more than 1 percent and Sumitomo Mitsui Financial is declining 0.6 percent.

Among oil stocks, Inpex is lower by 0.3 percent and Japan Petroleum is down almost 2 percent.

Among the major gainers, Subaru Corp and Nippon Suisan Kaisha are higher by more than 4 percent each, while Marui Group is advancing more than 3 percent.

On the flip side, Fujikura is losing almost 12 percent and Furukawa Electric is declining almost 5 percent. Fanuc Corp and Screen Holdings are down more than 3 percent each.

In the currency market, the U.S. dollar is trading in the upper 112 yen-range on Thursday.

Elsewhere in Asia, South Korea, Taiwan, Indonesia and Hong Kong are also higher, while New Zealand, Shanghai and Malaysia are lower.

On Wall Street, stocks initially moved higher after the Fed announced its widely expected decision to raise the target range for the federal funds rate by 25 basis points to 2 to 2.25 percent.

Traders seemed to react positively to the Fed removing word “accommodative” from its statement describing monetary policy. However, Fed Chairman Jerome Powell later told reporters that dropping “accommodative” from the statement does not signal a shift in the outlook for rates.

The Dow slid 106.93 points or 0.4 percent to 26,385.28, the Nasdaq dipped 17.10 points or 0.2 percent to 7,990.37 and the S&P 500 fell 9.59 points or 0.3 percent to 2,905.97.

The major European markets also moved to the upside on Wednesday. While the French CAC 40 Index climbed by 0.6 percent, the German DAX Index and the U.K.’s FTSE 100 Index both inched up by 0.1 percent.

Crude oil prices drifted lower on Wednesday after official data showed U.S. crude supplies to have increased for the first time in six weeks. WTI crude for November declined $0.71 or about 1 percent to $71.57 a barrel on the New York Mercantile Exchange.

by RTTNews Staff Writer

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