Asia report: Stocks mixed as Fed brings forward rate hike projections

Stocks in Asia closed in a mixed state on Thursday, as investors digested the latest news out of the US Federal Reserve, which signalled overnight that interest rate hikes would be brought forward to 2023.

In Japan, the Nikkei 225 was down 0.93% at 29,018.33, as the yen strengthened 0.02% against the dollar to last trade at JPY 110.69.

Uniqlo owner Fast Retailing was up 0.11%, while among the benchmark’s other major components, robotics specialist Fanuc was down 0.11%, and technology giant SoftBank Group slid 1.4%.

The broader Topix index was 0.62% weaker by the end of trading in Tokyo, closing at 1,963.57.

On the mainland, the Shanghai Composite was ahead 0.21% at 3,525.60, and the smaller, technology-centric Shenzhen Composite was 1.16% firmer at 2,359.40.

South Korea’s Kospi lost 0.42% to 3,264.96, while the Hang Seng Index in Hong Kong managed gains of 0.12% to 28,471.18.

Trading in the largest listed media company in the special administrative region, Next Digital, was halted on Thursday, after five directors of its Apple Daily publication - including the were arrested.

Hong Kong police said earlier that it had arrested five directors of an undisclosed company, saying it had colluded “with a foreign country or with external elements to endanger national security”.

The blue-chip technology stocks were on the back foot in Seoul, with Samsung Electronics down 1.1% and SK Hynix losing 2.32%.

Investor focus earlier in the session was very much across the Pacific on the Fed, which brought forward its timeline for raising interest rates after its latest two-day policy meeting overnight.

The so-called ‘dot plot’ of member expectations suggested two interest rate increases in 2023.

“An FOMC surprise is always a great way to inject some movement into markets, and the past 12 hours or so have been a case in point,” said IG chief market analyst Chris Beauchamp.

“Interest rate hikes - if you can call 50 basis points a hike - brought forward, and no mention of ‘transitory’ meant that investors were left scrabbling - and scribbling - to update their forecasts and views.

“The dust has settled to a degree, but it has left the dollar in a stronger position, while putting further pressure on gold and leaving the Dow still languishing some 3.5% off its record high while the S&P 500’s different weighting leaves it much closer to its most recent peak.”

Oil prices were higher as the region went to bed, with Brent crude last up 0.03% at $74.41 per barrel, and West Texas Intermediate rising 0.06% to $72.19.

In Australia, the S&P/ASX 200 was 0.37% weaker at 7,359.00, as fresh data showed another 115,000 people were employed in the country in May, compared to April.

The figure was significantly ahead of the 30,000 gain pencilled in by analysts polled by Reuters.

Across the Tasman Sea, New Zealand’s S&P/NZX 50 slipped 0.32% to 12,541.20, although retail plays were in the green in Wellington.

Outdoor clothing and equipment brand Kathmandu was up 1.9%, and automotive fuel retailer Z Energy was 1.6% firmer.

Both of the down under dollars were weaker against the greenback, with the Aussie last off 0.21% at AUD 1.3168, and the Kiwi retreating 0.1% to NZD 1.4198.