Asia-Pacific Markets Mixed with Fragile Investor Sentiment

On Thursday, Asia-Pacific markets remained mixed, as most regional markets shed the gains recorded earlier after the buoyant sentiment brought on by the rate hike by the US Federal Reserve faded. Overnight movements on Wall Street had given investor sentiment a boost, as the Fed had raised its interest rate by the highest level since 1994.

Major Indexes Lose

Amongst the major markets in the Asia-Pacific region, the Hong Kong Hang Seng index was leading losses, as it fell 2.17%, which brought it to a close of 20,845.43. There were sizable losses in Chinese stocks, as Netease, Alibaba and Tencent all dropped by 5.29%, 3.03% and 3.21%, respectively.

As for markets in mainland China, there was a 0.61% in the Shanghai Composite index by the end of the trading day, which brought it to a close of 3,285.38. Meanwhile, a 0.109% decline was reported in the Shenzhen Component, as it fell to 12,150.96.

South Korea’s Kospi index reported a gain of about 0.16%, as it closed the trading day at a value of 2,451.41. There was also a 0.4% rise in Japan’s Nikkei 225, which brought it to 26,431.20 and a 0.64% gain in Topixthat brought it to 1,867.81. There was a 1.44% rise in the shares of Fast Retailing, while a 0.47% gain was also seen in the stock of Fanuc, the robot maker.

As for Australia, the S&P/ASX 200 index was also down for the day by 0.15% and this brought it to 6,591.10. The unemployment figures in Australia were holding steady at 0.39%, which was another indication that the Reserve Bank of Australia would also continue raising rates like the Fed and other central banks. There was also a 0.91% drop in the MSCI’s index of Asia-Pacific shares, excluding Japan.

Hike by the Fed

After the interest rate hike by the Fed in the United States, there was a great deal of volatility on Wall Street. However, market indexes climbed to session highs after the FOMC decided to increase their benchmark funds rate and bring it between the range of 1.5% and 1.75%. It is the highest the rate has been before the COVID-19 pandemic had hit back in March 2020.

Jerome Powell, the chairman of the Federal Reserve, said that their next meeting would also see an interest rate hike of either 50 basis points, or 75 basis points. This saw the Dow Jones Industrial Average end a losing streak of five days, as it jumped by 1% to close at 30,668.53.There was a 1.46% increase in the S&P 500, as it moved up to 3,789.99, while a 2.5% gain was recorded in the Nasdaq Composite that pushing it up to 11,099.15.

Conclusion

The tumbles seen in the stock markets on Thursday had also been recorded earlier in the week and it was the news of the Fed hiking the interest rate that had given them a lift. But, the interest rate hike from the SNB and the BoE once again sent the markets in turmoil.

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