Asia Dow decreases 2% as Fed chair dims hopes of rate pause
Major Asian stock markets closed in the negative territory on Thursday, as Federal Reserve Chair Jerome Powell dimmed hopes that the central bank would pause interest rate hikes.
On Wednesday, the Fed raised its benchmark interest rate by 75 basis points for the fourth consecutive time to fight record inflation, carrying the target range for the federal funds rate to between 3.75% and 4% — its highest since January 2008.
There are “some ways to go” with rate hikes and the “ultimate level” of increases will be higher than previously expected, Powell said during a news conference after the conclusion of the Fed’s two-day meeting.
The Asia Dow, which includes blue-chip companies in the region, lost 2%, to end at 2,854.5 points.
Tokyo’s Nikkei 225 was slightly down by 0.06%, to close at 27,663.4.
The Hang Seng,the benchmark for blue-chip stocks trading on the Hong Kong stock exchange, declined 3.08%, to 115,339.49.
The Hong Kong Monetary Authority raised the base rate by 75 basis points to 4.25% on Thursday, for the sixth time this year.
The S&P Global Hong Kong PMI rose to 49.3 in October from 48.0 in September, still below threshold level indicating a contraction as output narrowed due to weaker demand.
China’s Shanghai Stock Exchange dropped 0.19%, to 32,997.81.
The Caixin China General Services PMI fell to 48.4 in October from 49.3 in September, contracting for the second straight month amid COVID-19 restrictions.
India’s Sensex benchmark decreased 0.11%, to close at 60,836.4 while the Singapore index dove 1.23%, to 3,102.5.
The S&P Global Singapore PMI rose to 57.7 in October from 57.5 in the previous month, rising at the fastest pace in three months.