SINGAPORE – Asia-Pacific markets fell on Thursday as investors announced an overnight update from the US Federal Reserve indicating the central bank has a plan interest rate hike as soon as March.
Hong Kong’s Hang Seng Index fell 2% while the tech-focused Hang Seng Tech index fell 2.91%. Hong Kong-listed shares of China’s big tech names all fell sharply: Alibaba shares fell 5.13%, JD fell 3.93%, Meituan fell 4.8%, Baidu fell 2.96% and Tencent lost 2.07%.
Elsewhere, mainland markets were quieter. Shanghai Composite Component Up Partly, But Shenzhen Component Down 0.24%
In Japan, Nikkei 225 slipped 1.67% while Topix fell 1.23%.
Samsung Electronics reported operating profit for the fourth quarter of 2021 was up 53% year-on-year, but it was down 12% from three months earlier.
The global chipmaker says its cash-flowing memory business expects server demand to pick up in 2022 as companies increase investment in information technology, but problems with supply chain continues.
Samsung shares down 1.55%
Australian shares recouped earlier gains as ASX 200 down 1.77%.
Thursday’s trading session in Asia-Pacific followed an overnight drop on Wall Street, where the Dow Jones Industrial Average ended the day down 129 points, after having risen more than 500 points at one point, following the update. Fed day.
Oil prices rose up to 2% overnight, with international benchmarks Brent Crude Oil Futures hit $90 on Wednesday for the first time since 2014.
The Taiwan market is closed for a holiday on Thursday.
Fed meeting, US markets
The Federal Open Market Committee said a quarter percentage point increase to its benchmark short-term borrowing rate could be imminent – it would be the Fed’s first hike since December 2018.
Fed Chairman Jerome Powell indicated at a news conference that the US central bank has “quite a lot of room to raise interest rates without threatening the labor market.” Inflation in the states is at its hottest in nearly 40 years.
Although the Fed’s post-meeting statement did not provide a specific timeline for when to raise rates, signs suggest it could happen as soon as the March meeting.
“The Fed also used this meeting to continue the discussion of balance sheet normalization and lay out a set of principles on how to approach the balance sheet shrink. Most importantly, it wants to make the balance sheet smaller. it is predictable but sensitive to both the economy and the market”. ANZ analysts said.
Major US stock market averages reversed gains after Powell’s comments.
The Dow Jones Industrial Average closed down 0.4% on Wednesday at 34,168.09. It rallied more than 500 points before the Fed update. The S&P 500 index fell 0.2 percent to 4,349.93, while the Nasdaq Composite ended the session mostly unchanged at 13,542.12, boosted by a post-earnings rise from Microsoft.
Oil prices fall
Oil prices fell on Thursday during Asian trading hours: US crude oil futures fell 0.29% while the global benchmark Brent down 0.4%.
In overnight trading, prices rose more than 2% amid rising tensions between Russia and Ukraine, where experts say there are concerns about Moscow’s invasion of the Eastern European country. The price of Brent oil at one point reached $90, but fell slightly again.
In another development, the South Korean military said that Reuters reported that North Korea fired what appeared to be two ballistic missiles on Thursday. The reclusive state conducted six missile tests this month.
Currency
The US Dollar Index, tracks the greenback against a basket of its currencies, last trading at 96.563, up from 95,948.
In other currencies, Japanese yen was trading at 114.59 per dollar, while Australian dollar is $0.7082.
– CNBC’s Saheli Roy Choudhury, Jeff Cox, Hannah Miao and Fred Imbert contributed to this report.
