Asian stock markets are trading mostly higher on Thursday, following the broadly positive cues from Wall Street overnight, as traders reacted positively to the US Fed’s decision not to raise its benchmark lending rate more than widely expected. The central bank raised its interest rates by another quarter point and signaled further rate hikes. Asian Markets closed mostly higher on Wednesday.
The latest interest rate hike by the Fed comes after the central bank raised rates by 75 basis points in November and by 50 basis points in December. The Fed also said it anticipates ongoing increases in interest rates will be appropriate in order to attain a stance of monetary policy that is sufficiently restrictive to return inflation to 2 percent over time.
During his post-meeting press conference, Fed Chair Jerome Powell said the central bank does not believe rates are yet at a sufficiently restrictive policy stance and suggested a “couple of more rate hikes” will be needed to get to that level. He acknowledged that inflation was starting to ease and that financial conditions had tightened significantly over the past year.
The next monetary policy meeting is scheduled for March 21-22, with CME Group’s FedWatch Tool currently indicating an 81.8 percent chance the Fed will raise rates by another 25 basis points.
The Australian stock market is modestly higher on Thursday, extending the gains in the previous session, with the benchmark S&P/ASX 200 staying above the 7,500 level to a nine-month highs, following the broadly positive cues from Wall Street overnight, with strong gains in gold mining and technology stocks partially offset by weakness in iron ore mining and energy stocks.
The benchmark S&P/ASX 200 Index is gaining 15.50 points or 0.21 percent to 7,517.20, after touching a high of 7,548.20 earlier. The broader All Ordinaries Index is up 23.50 points or 0.31 percent to 7,733.20. Australian stocks ended modestly higher on Wednesday.
Among major miners, Rio Tinto is losing almost 2 percent and Fortescue Metals is edging down 0.5 percent, while Mineral Resources and BHP Group are down almost 1 percent each. OZ Minerals is flat.
Oil stocks are mostly lower. Beach energy, Origin Energy, Santos and Woodside Energy are all losing more than 1 percent each.
In the tech space, Afterpay owner Block is gaining more than 4 percent, Xero is surging almost 7 percent, Zip is advancing more than 7 percent, Appen is adding almost 1 percent and WiseTech Global is advancing more than 5 percent.
Among the big four banks, Commonwealth Bank and ANZ Banking are flat, while National Australia Bank and Westpac is edging up 0.2 percent each.
Among gold miners, Northern Star Resources is gaining almost 5 percent, Newcrest Mining is adding almost 4 percent, Evolution Mining are surging almost 7 percent, Resolute Mining is advancing more than 5 percent and Gold Road Resources is up 4.5 percent.
In economic news, the total number of building permits issued in Australia was up a seasonally adjusted 18.5 percent on month in December, the Australian Bureau of Statistics said on Thursday, coming in at 16,556. That blew away expectations for an increase of 1.0 percent following the 9.0 percent contraction in November. On a yearly basis, overall permits slipped 3.8 percent.
In the currency market, the Aussie dollar is trading at $0.714 on Thursday.
The Japanese stock market is modestly higher in choppy trading on Thursday, extending the gains in the previous session, with the Nikkei 225 moving above the 27,400 level, following the mostly positive cues from Wall Street overnight, with gains among market heavyweights and technology stocks. Traders also reacted positively to the US Fed’s monetary policy announcement.
The benchmark Nikkei 225 Index closed the morning session at 27,391.85, up 44.97 points or 0.16 percent, after touching a high of 27,472.44 earlier. Japanese stocks closed slightly higher on Wednesday.
Market heavyweight SoftBank Group is gaining more than 1 percent and Uniqlo operator Fast Retailing is also adding more than 1 percent. Among automakers, Toyota is edging down 0.2 percent and Honda is losing almost 1 percent.
In the tech space, Screen Holdings is gaining almost 2 percent, Tokyo Electron is adding almost 3 percent and Advantest is advancing more than 4 percent.
In the banking sector, Mitsubishi UFJ Financial is losing more than 1 percent and Mizuho Financial is down almost 1 percent, while Sumitomo Mitsui Financial is flat.
Among the major exporters, Mitsubishi Electric is losing almost 2 percent and Sony is edging up 0.3 percent, while Panasonic and Canon are flat.
Among the other major gainers, M3 is gaining 3.5 percent.
Conversely, Sumitomo Chemical is slipping more than 6 percent, NSK is losing almost 5 percent and Mitsui Chemicals is declining 3.5 percent, while Kyocera and Mitsubishi Chemical Group are down almost 3 percent each.
In economic news, the monetary base in Japan was down 3.8 percent on year in January, the Bank of Japan said on Thursday – coming in at 637.693 trillion yen. That follows the 6.1 percent contraction in December. Banknotes in circulation fell 2.7 percent, while coins in circulation dropped 4.0 percent. Current account balances sank an annual 5.2 percent, including a 6.6 percent decline in reserve balances. The adjusted monetary base surged 43.8 percent on year to 643.161 trillion yen.
In the currency market, the U.S. dollar is trading in the mid-128 yen-range on Thursday.
Elsewhere in Asia, Taiwan is up 0.8 percent, while New Zealand, Hong Kong, South Korea, Malaysia and Indonesia are higher by between 0.1 and 0.3 percent each. China and Singapore are down 0.1 and 0.4 percent, respectively.
On Wall Street, stocks moved sharply higher late in the trading session on Wednesday, as traders reacted positively to the Federal Reserve’s monetary policy announcement. With the upward move, the Nasdaq and the S&P 500 reached their best closing levels in four months.
The major averages all finished the day in positive territory, although the Dow inched up just 6.92 points or less than a tenth of a percent to 34,092.96. The Nasdaq surged 231.77 points or 2.0 percent to 11,816.32, while the S&P 500 jumped 42.61 points or 1.1 percent to 4,119.21.
Meanwhile, the major European markets turned in a mixed performance on the day. While the German DAX Index rose by 0.4 percent, the French CAC 40 Index and the U.K.’s FTSE 100 Index both edged down by 0.1 percent.
Crude oil futures fell to a three-week low on Wednesday, weighed down by data showing an increase in crude inventories last week in the U.S. West Texas Intermediate Crude oil futures for March sank $2.46 or 3.1 percent at $76.41 a barrel.
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