Asian equities mixed as Wall Street falls post-Fed rate hike
Asian shares exhibited a mixed performance on Thursday, following a decline on Wall Street after the Federal Reserve’s decision to raise interest rates for the first time in three years. US futures exhibited an upward trajectory. The quarter of a percentage point increase raises the Fed’s key rate to a target range of 3.75 per cent-4.00 per cent, as it seeks to manage US inflation that has persistently exceeded its target. Japan’s Nikkei 225 index registered an increase of 0.2 percent, reaching a level of 64,067.53. South Korea’s Kospi experienced an increase of 0.9 percent, reaching a level of 6,778.49. The Hong Kong Hang Seng declined by 0.7 per cent to 24,533.46, whereas the Shanghai Composite index decreased by 0.4 per cent to 3,877.46.
Australia’s S&P/ASX 200 experienced an increase of 0.3 percent, reaching a level of 8,718.20. Taiwan’s Taiex experienced an increase of 1.3 percent, whereas India’s Sensex saw a modest rise of 0.3 percent. On Wednesday, the benchmark S&P 500 experienced a decline of 0.5 percent. The Dow Jones Industrial Average experienced a decline of 1.2 percent, while the technology-focused Nasdaq composite remained largely stable. Market reactions were “pretty much expected since the rate rise was also in line with market expectation,” stated Lorraine Tan. However, the ongoing conflict in Iran is likely to maintain upward pressure on inflation.
Following the Fed’s announcements, the two-year US Treasury yield surged to 4.72 percent, up from approximately 4.67 percent late Tuesday. The yield on the 10-year Treasury remained at approximately 5.00 per cent, sustaining an elevated level. Government bond yields have persisted at elevated levels since the onset of the conflict, as the energy shock induced by the war exacerbates inflationary pressures. Concurrently, investors express concerns regarding the escalating US national debt. The US dollar experienced a decline early Thursday, trading at 156.04 Japanese yen, down from 156.26 yen.
The euro was trading at $1.1467, an increase from $1.1465. Oil prices experienced a modest increase, attributed to the ongoing constraints on oil flows in the Strait of Hormuz, a vital conduit for global oil transportation. Additionally, Saudi Arabia’s decision to close a significant oil pipeline further exacerbates supply pressures as efforts to repair the pipeline are underway. Brent crude, the international benchmark, experienced a 0.1 per cent increase, reaching $105.89 early Thursday.
