Asian markets higher after US rate hike
Shanghai and Hong Kong advanced while Seoul and Sydney declined. Japanese markets were closed for a holiday.
Wall Street’s benchmark S&P 500 index fell 0.7 percent on Wednesday after the Fed announced a 0.25 percentage point increase in its lending rate. The Federal Reserve boosted its benchmark rate by a quarter-point to 5.1 percent.
The Fed dropped a reference to “additional policy firming” in its statement but stopped short of declaring an end to rate hikes.
“The key takeaway, in my view, is that we are likely at or very near the end of the rate hike cycle,” Kristina Hooper of Invesco said in a report.
The Shanghai Composite Index rose 0.6 percent to 3,341.73, and the Hang Seng in Hong Kong surged one percent to 19,899.02.
The Kospi in Seoul lost 0.2 percent to 2,495.40 and Sydney’s S&P-ASX 200 fell 0.1 percent to 7,187.20.
India’s Sensex opened up 0.2 percent at 61,300.29. New Zealand and Southeast Asian markets advanced.
On Wall Street, the S&P 500 fell to 4,090.75. The Dow Jones Industrial Average lost 0.8 percent to 33,414.24 and the Nasdaq composite slipped 0.5 percent to 12,025.33.
Traders expect a U.S. recession this year as the Fed and other central banks in Europe and Asia try to extinguish inflation that was near multi-decade highs.
Jitters have increased following three high-profile bank failures in the United States and one in Switzerland blamed on strain from higher interest rates. Central banks have tried to reassure investors by pledging steps including additional lending if needed.
Traders expect the Fed to start cutting rates as early as this year to prop up weakening economic growth.
On Thursday, Fed Chair Jerome Powell said he doesn’t expect rate cuts that soon.
Traders worry industry turmoil might prompt banks to reduce lending, worsening downward pressure on economic activity. Powell mentioned a survey that is yet to be released and will show how much loan officers at banks say they are tightening lending standards. / AP