Asia report: Region weaker after Fed rate hike
Markets in Asia were mostly in the red on Thursday, as traders digested the widely-expected hike in interest rates from the US Federal Reserve overnight, which came with signals they were looking at two more rises before year-end.
In Japan, the Nikkei 225 was down 0.99% at 22,738.61, as the yen strengthened 0.13% against the dollar to last trade at JPY 110.20.
Among the biggest losers in Tokyo were consumer products and mining plays, while banks and shipping firms managed to hold out in the green.
On the mainland, the Shanghai Composite lost 0.17% to 3,044.46, and the smaller, technology-heavy Shenzhen Composite was 0.55% lower at 1,721.89.
Weakness in China was fuelled by a miss for its industrial production growth in May, which was below forecasts at 6.8%.
Retail sales and fixed asset investment measures also disappointed.
South Korea’s Kospi slid 1.84% to 2,423.48, while the Hang Seng Index in Hong Kong was off 0.93% at 30,440.17.
Carmakers were on the back foot in Seoul, with Hyundai Motor falling 3.91%, while the blue-chip technology stocks were a mixed bag.
LG Electronics managed a 4% gain by end-of-play, while Samsung Electronics dropped 2.43%.
Global sentiment was largely guided by the Federal Reserve, which hiked its interest rates target by 25 basis points overnight to between 1.75% and 2% - a move widely expected by markets.
It was the second rise in interest rates this year from the Fed, with the last coming in March.
“The rate hike was a foregone conclusion, so did little to stir,” noted Mizuho Bank head of economics and strategy Vishnu Varathan.
“But the decisive vote to shift up 2018 'dot plot' to four rate hikes from three was arguably the real, and more distinct hawkish trigger.”
Looking ahead, markets were turning their focus on the end of the European Central Bank’s meeting later in the global day, with policymakers expected to issue more detail on the winding down of its asset-buying programme.
After that, the Bank of Japan is expected to stand pat on its monetary policy at the end of its meeting on Friday.
Oil prices were higher, with Brent crude last up 0.13% at $76.84 per barrel, and West Texas Intermediate adding 0.73% to $67.13.
In Australia, the S&P/ASX 200 slid 0.11% to 6,016.60, with losses in the hefty financials subindex offsetting gains for the materials and telecoms sectors.
Across the Tasman Sea, New Zealand’s S&P/NZX 50 eked out gains of 0.01% to 8,978.18, with flag carrier Air New Zealand the best performer, rising 2.4%.
The down under dollars were mixed, with the Aussie last 0.23% weaker against the greenback at AUD 1.3227, while the Kiwi strengthened 0.2% to NZD 1.4208.