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Asian markets are retreating as the Fed envisages staying for the next few years



Tourists on a Huangpu river cruise pass Shanghai Tower. Stocks in Shanghai fell on Thursday.

Getty Images

Asian stock markets fell on Thursday after the US Federal Reserve announced that its benchmark rate would remain close to zero at least through 2023, but announced no further stimulus plans.

Shanghai Composite Index SHCOMP,
-1.00%
lost 1% and Nikkei 225 NIK,
-0.71%
in Tokyo sank 0.7%. Hang Seng HSI,
-1.64%
in Hong Kong withdrew 1.8%.

Kospi 180721,
-1.31%
in Seoul lost 1.4%, while Sydney’s S & P / ASX 200 XJO,
-1.16%
fell 1.1%. Shares in NZ50GR,
-0.15%,
Taiwan Y9999,
-0.89%,
Indonesia JAKIDX,
-0.21%
and Singapore STI,
-0.16%
also withdrew.

The Wall Street benchmark S&P 500 index closed 0.5% after the Fed said it would not raise interest rates until inflation reaches 2%, which the US Federal Reserve’s own projections show it does not expect until the end of 2023.

President Jerome Powell promised the Fed “we will not lose the millions of Americans who remain out of work” but gave no indication of a new stimulus.

The markets “hoped the Fed put political money where its mouth is” but “ended up a bit disappointed,” Mizuho Bank said in a report. The Fed was “long on talk and short on action.”

Global markets have recovered most of this year’s losses, bolstered by the central bank’s supply of credit in struggling economies and hopes for a coronavirus vaccine.

However, forecasts warn that the recovery may be too large and rapid to be supported by uncertain economic activity.

U.S. investors trust Congress for a new support package after additional unemployment benefits that help support spending spending have expired, but lawmakers are locked into its potential size.

S&P 500 SPX,
-0.46%
fell to 3,385.49. Dow Jones Industrial Average DJIA,
+ 0.13%
increased 0.1% to 28,032.38. Nasdaq Composite COMP,
-1.25%
lost 1.3% to 11,050.47.

Powell said the U.S. economy has recovered faster than

The Fed predicted that the economy will shrink 3.7% this year, an improvement over the outlook in June of a decline of 6.5%. The Fed expected unemployment at the end of the year of 7.6% instead of the 9.3% expected in June.

“A full economic recovery is unlikely until people are confident that it is safe to re-engage in a wide range of activities,” Powell said.

In energy markets, benchmark US crude oil for delivery in October CLV20,
-1.46%
lost 28 cents to $ 39.88 per share. barrel of electronic commerce on the New York Mercantile Exchange. The contract rose $ 1.88 on Wednesday to $ 40.16. Burned crude oil for delivery in November BRNX20,
-1.25%
throw 22 cents to $ 42 per barrel in London. It got $ 1.69 the previous session to $ 42.22.

USDJPY Dollars,
+ 0.09%
edged down to 105.04 yen from Wednesday’s 105.01 yen.


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