Asia Markets Mixed After Fed Raises Rates and Hints Hikes Could End
Asian markets have dropped following the Federal Reserve's decision to increase rates by 25 basis points and hint at a possible conclusion to rate hikes.
CNBC's live blog is tracking Asia-Pacific markets.
Following the U.S. Federal Reserve's expected 25 basis point rate hike, Asia-Pacific markets showed mixed responses. This brings the federal funds rate range to 5%-5.25%, the highest since August 2007.
The Fed's post-meeting statement hinted at a possible pause in future hikes. It omitted a sentence from the previous statement that suggested further policy tightening may be necessary to achieve the Fed's 2% inflation goal.
In mainland China, stocks fell after the Labor Day holiday. The Shenzhen Component fell 0.8% and the Shanghai Composite rose 0.41% as China's factory activity contracted for the first time in three months, according to the Caixin China purchasing managers' index.
Hong Kong's Hang Seng index gained 1.07% and the Hang Seng Tech index rose 0.78%.
In Australia, the S&P/ASX 200 fell 0.16% as the country's trade surplus widened to AU$15.27 billion in March.
South Korea's Kospi fell 0.16%, while the Kosdaq rose slightly. Japanese markets were closed for a holiday.
In the U.S., all three major indexes fell after the Fed decision, extending their losing streak to three days. The Dow Jones Industrial Average fell 0.80%, the S&P 500 dipped 0.70%, and the Nasdaq Composite lost 0.46%.
The State Bank of India told CNBC that India's banking system is robust, with a diversified liability structure and loan book. The bank's chairman, Dinesh Kumar Khara, said he does not foresee a contagion effect from the fallout of banks in the U.S. and Europe. He also predicted "decent growth" in their loan book due to a growing Indian economy.
Hong Kong's monetary authority raised its base interest rate to 5.5% following the U.S. Federal Reserve's rate hike.
Australia's trade surplus in March was AU$15.27 billion, higher than the AU$14.15 billion recorded in February.
China's manufacturing activity contracted for the first time in three months, with the Caixin manufacturing purchasing managers' index reading at 49.5.
Domestic tourism in China during its Golden Week surged 70.8% year-on-year, returning to pre-pandemic levels.
Asia-Pacific currencies strengthened against the greenback following the U.S. Federal Reserve's signal of a potential end to its rate hiking cycle.
Shares of major Australian banks fell after National Australia Bank missed earnings expectations for its half year ended March.
The Fed raised rates for a 10th time in this tightening cycle and signaled a possible pause in future hikes.
Regional bank stocks fell after Fed Chair Jerome Powell's press conference.
Andrew Slimmon of Morgan Stanley Investment Management advised buying some "offensive" stocks, warning against owning only very defensive stocks.
— Weizhen Tan
CNBC Pro: Historical Trading Strategies for Volkswagen and BMW Quarterly Earnings
Volkswagen and BMW, two of Germany's automotive giants, are scheduled to release their first-quarter earnings later this Thursday.
CNBC Pro has analyzed five years of data from FactSet to evaluate the performance of these automakers' stocks against benchmark indexes, depending on the results of their quarterly earnings reports.
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Dollar Reaches Session Lows
On Wednesday, the dollar index, which measures the greenback's value against six other major global currencies, dropped over 0.7% to a session low of 101.07. This is the lowest it has been since April 16. This decline occurred as Federal Reserve Chair Jerome Powell responded to queries following the central bank's most recent policy decision.
— Fred Imbert, Gina Francolla
WTI Crude Prices Drop to Lowest Since March
As of 7:28 a.m. ET Wednesday, WTI Crude (JUN) prices decreased by 3.07%, reaching a low of $69.46. This is the lowest price for WTI Crude since it traded as low as $69.13 on Mar. 27.
So far this week, WTI Crude has fallen nearly 9.5%, potentially making this its worst week since Mar. 17, when it dropped almost 13%.
The Energy Select Sector SPDR Fund (XLE) has also decreased by 6.6% this week, which could make this its worst week since Mar. 17, when it fell 6.85%. Energy companies Halliburton and Exxon Mobil have seen losses of 10.4% and 8.4% this week, respectively.
— Hakyung Kim, Gina Francolla