Asia report: Most markets lower as investors digest Fed news
Most markets in Asia finished lower on Thursday, as investors digested news out of the US Federal Reserve overnight.
AUD/USD
$0.6533
23:03 26/04/24
GBP/NZD
NZD2.1025
23:53 26/04/24
Hang Seng
17,651.15
10:20 26/04/24
Nikkei 225
37,934.76
09:44 26/04/24
USD/JPY
¥158.3270
01:54 27/04/24
In Japan, the Nikkei 225 was ahead 0.18% at 20,347.48, as the yen lost ground against the dollar, last trading off 0.29% at JPY 112.54.
The Bank of Japan stood pat on interest rates, as expected, although there was one dissenter during the central bank’s two day meeting.
It’s understood he was not satisfied the current strategy was enough for the country to achieve its inflation target.
In unsurprising news on the corporate front, American memory giant Western Digital said it would begin arbitration against Toshiba, after the Japanese tech conglomerate announced it would sell its memory chip division to a consortium led by Bain Capital in a deal worth JPY 2trn on Wednesday.
Western Digital had put forward a rival bid, and tried to block earlier attempts of a sale, claiming it had the right to more involvement due to its status as a joint venture partner of Toshiba at a manufacturing facility.
Toshiba has been trying to sell its valuable memory chip division for several months, in a bid to stem a cash crisis arising from the failure of its US nuclear development acquisition Westinghouse.
Its stock finished 1.59% lower in Tokyo.
On the mainland, the Shanghai Composite was down 0.23% at 3,358.19, and the smaller, technology-centric Shenzhen Composite finished 0.84% lower at 1,995.42.
South Korea’s Kospi fell 0.24% to 2,406.50, while the Hang Seng Index in Hong Kong was 0.06% softer at 28,110.33.
Focus was on the US, as the Federal Reserve announced it would begin winding down its mammoth $4.5trn balance sheet from next month, while leaving interest rates on hold as expected.
The central bank did indicate that another rates rise remained likely by the end of the calendar year, although it lowered its expectation for rate hikes between now and 2019 by one.
“The lack of movement [in the dot plot] … signals that the committee is still comfortable that the recent dip in inflation is a blip,” noted ING Asa head of research Rob Carnell.
Oil prices were lower during Asian trading, with Brent crude last down 0.45% at $56.04 per barrel and West Texas Intermediate off 0.54% at $50.42.
In Australia, the S&P/ASX 200 lost 0.94% to close at 5,655.42, with gains in the energy subindex being offset by losses in most other sectors.
Commonwealth Bank of Australia lost 0.29% after the firm said it was selling its entire Australia and New Zealand life insurance business to AIA Group, in a deal worth AUD 3.8bn.
Across the Tasman Sea, the S&P/NZX 50 was off 0.3% at 7,795.41, led lower by construction giant Fletcher Building, which lost 4.8% as it went ex-dividend.
There was also media speculation that further losses in its contracting business could be likely.
On the economic front, New Zealand’s economy expanded in the second quarter, with official GDP growth put at 0.8%.
First quarter GDP growth was also revised upwards, to 0.6% from the previous reading of 0.5%.
Both of the down under dollars were weaker on the greenback, with the Kiwi last losing 0.7% to NZD 1.3687 and the Aussie retreating 1.16% to AUD 1.2596.