Business and Economy
Asian stocks flat as investors await Fed meeting results
Asian stock markets were little changed on Wednesday (Pexels photo)
SEOUL, Korea, Republic Of — Asian stock markets were little changed on Wednesday as investors took to the sidelines ahead of the Federal Reserve’s announcement of the result of its meeting.
KEEPING SCORE: Japan’s Nikkei 225 was flat at 20,298.80 and South Korea’s Kospi edged down 0.1 per cent to 2,413.63. Hong Kong’s Hang Seng index added 0.3 per cent to 28,117.50. China’s Shanghai Composite Index added 0.1 per cent to 3,359.74. Australia’s S&P/ASX 200 fell 0.2 per cent to 5,701.10. Stocks in Southeast Asia were mixed.
FED WATCH: At the end of its two-day meeting on Wednesday, the Federal Reserve is widely expected to announce that it will begin to reduce its enormous bond portfolio, which reached $4.5 trillion. The move will gradually increase long-term borrowing rates. While shrinking the Fed’s balance sheet is much expected, when and how the Fed will manipulate its target for short-term interest rates is less clear. After leaving its benchmark rate at a record low for seven years after the 2008 crisis, the Fed has modestly raised the rate four times since December 2015 to a still-low range of 1 per cent to 1.25 per cent.
ANALYST’S TAKE: “The Fed’s view will likely play the key role in driving price action. Investors are likely to look past the Fed’s interest rate decision and even the plan to shrink the Fed’s balance sheet, focusing primarily upon the Fed’s forward guidance,” said Jingyi Pan, a market strategist at IG in Singapore. “This could come in multiple forms such as the Fed’s economic projections, statement and also Fed chair Yellen’s testimony.”
WALL STREET: U.S. stock markets finished with a slight gain on Tuesday. The Standard & Poor’s 500 index rose 0.1 per cent to 2,506.65. The Dow Jones industrial average gained 0.2 per cent to 22,370.80. The Nasdaq composite added 0.1 per cent to 6,461.32. The Russell 2000 index of smaller-company stocks declined 0.1 per cent, to 1,440.40.
OIL: Benchmark U.S. crude added 35 cents to $50.25 per barrel on the New York Mercantile Exchange. The contract fell 45 cents to settle at $49.90 a barrel on Tuesday. Brent crude, used to price international oils, gained 24 cents to $55.38 per barrel in London.
CURRENCIES: The dollar fell to 111.54 yen from 111.58 yen. The euro strengthened to $1.2009 from $1.1996.
