Fed Signalled A Rate Hike Before Asian Stocks Fell

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  • Asian stock markets have followed Wall Street lower after investors saw minutes from a Federal Reserve meeting as a sign the U.S. central bank might hike interest rates faster to cool inflation.
  • Shanghai, Tokyo, Hong Kong and Sydney retreated.
  • The contract rose 86 cents to $77.85 on Wednesday.

Investors interpreted minutes from a Federal Reserve meeting as a sign that the US central bank would boost interest rates quicker to calm inflation, sending Asian stock markets lower on Thursday as reported by ABC News.

Wall Street

Shanghai, Tokyo, Hong Kong and Sydney retreated.

On Wednesday, Wall Street’s benchmark S&P 500 index fell by its biggest daily margin in four months.

Notes released Thursday from the Fed meeting last month showed policymakers believe the U.S. job market is nearly healthy enough that ultra-low interest rates are no longer needed.

The Shanghai Composite Index slid 0.7% to 3,571.18 and the Nikkei 225 in Tokyo tumbled 2.1% to 28,721.49.

The Hang Seng in Hong Kong lost 0.6% to 22,774.93.

Investors encouraged

The Kospi in Seoul retreated 0.4% to 2,942.54 and Sydney’s S&P-ASX 200 sank 1.5% to 7,449.80.

New Zealand and Jakarta declined while Singapore and Bangkok gained.

The Fed indicated in mid-December that plans to wind down stimulus would be accelerated after U.S. consumer inflation hit a 39-year high.

That jolted investors who had been encouraged by stronger corporate profits and the spread of coronavirus vaccinations.

On Wall Street, the S&P 500 slid 1.9% on Wednesday to 4,700.58.

Bond yields, or the difference between the day’s market price and the payout at maturity, widened after the Fed notes came out.

Tech companies

The Fed minutes showed policymakers expressed concern that inflation was spreading into more areas of the economy and would last longer than expected.

Tech companies were the biggest drag on the market.

Microsoft fell 3.8% and software maker Adobe shed 7.1%.

In energy markets, benchmark U.S. crude lost 76 cents to $77.09 per barrel in electronic trading on the New York Mercantile Exchange.

The contract rose 86 cents to $77.85 on Wednesday.

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Source: ABC News

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