GLOBAL MARKETS DJIA 32030.11 -530.49 -1.63% Nasdaq 11669.96 -190.15 -1.60% S&P 500 3936.97 -65.90 -1.65% FTSE 100 7566.84 30.62 0.41% Nikkei Stock 27352.39 -114.22 -0.42% Hang Seng 19572.68 -18.75 -0.10% Kospi 2410.33 -6.63 -0.27% SGX Nifty* 17107.00 -51.0 -0.30% *March contract USD/JPY 130.67-68 -0.58% Range 131.50 130.63 EUR/USD 1.0897-900 +0.39% Range 1.0900 1.0856 CBOT Wheat May $6.634 per bushel Spot Gold $1,971.03/oz 0.1% Nymex Crude (NY) $70.15 $0.48 US STOCKS
U.S. stocks ended lower after the Federal Reserve raised interest rates but signaled that further hikes might be limited.
Following the central bank's latest decision, major U.S. indexes rose. Then, stocks turned down after Fed Chair Jerome Powell said during a press conference that a rate cut this year wasn't part of the central bank's "baseline expectation."
The S&P 500 finished down 1.7%, the Dow Jones Industrial Average gave up 1.6% and the tech-heavy Nasdaq Composite Index decreased 1.6%.
With an already cloudy economic outlook now further darkened by bank distress, buying into the stock market's optimism could prove shortsighted, said Rich Weiss, chief investment officer of multi-asset strategies at American Century Investments. "The banking issues are just confirming evidence to us that things are likely to get worse before they get better," Mr. Weiss said. The funds he oversees have been shunning stocks in favor of cash and safer bonds.
ASIAN STOCKS
Japanese stocks were lower in early trade, dragged by falls in financial and electronics stocks, as concerns continued about the global banking sector and the yen strengthened following the Fed's policy decision overnight. Investors remained focused on any signs of weakness in the banking sector, after the Fed approved another quarter-percentage-point rate increase overnight. USD/JPY was at 131.18, down from 132.42 as of Wednesday's Tokyo stock market close. The Nikkei Stock Average was down 0.9% at 27213.00.
South Korea's benchmark Kospi was 0.7% lower at 2399.48 in early trade, tracking Wall Street's retreat overnight after the Fed's quarter-percentage-point rate increase. Financial and auto stocks fell amid lingering banking-sector jitters after U.S. Treasury Secretary Janet Yellen told lawmakers that she wasn't considering ways to provide broad guarantees to uninsured bank deposits. USD/KRW was 0.7% lower at 1,298.00.
Hong Kong's Hang Seng Index was up 0.4% at 19661.43 in morning trade, bucking the trend of broad early losses among regional equities and U.S. declines overnight after the Fed's 25bp rate hike. The Hang Seng Tech Index also rose, up 0.8% at 4041.18. IG market strategist Yeap Jun Rong said the rate increase was widely expected, but reckoned market jitters could persist due to the lingering risk of turmoil in the banking sector spilling over.
Chinese stocks were slightly higher in morning trade. The benchmark Shanghai Composite Index was up 0.52 point at 3266.27, the Shenzhen Composite Index gained 0.2% to 2102.65 and the tech-heavy ChiNext Price Index rose 0.4% to 2350.86. The market may sustain its positive momentum from now on after a pullback in late January as reopening excitement cooled and expectations over China's consumption rebound were dialed back. Analysts at Galaxy Securities said A-shares' risk-reward profile is brightening after the valuation reset, while higher overseas risk may further raise investor interest in Chinese equities.
FOREX
Most Asian currencies strengthened against the USD in early trade on prospect of lessened Fed tightening after it raised rates as expected, but signaled that further rate increases could be limited. Overall, the foreign-exchange markets could be relieved that the end of more rate increases is near, and trigger more reversal of USD strength, said MUFG Bank's senior currency strategist Jeff Ng in a research report. USD/KRW fell 0.4% to 1,294.07 and USD/SGD edged 0.1% lower to 1.3286, while AUD/USD gained 0.4% to 0.6713.
METALS
Gold prices were slightly higher in early Asian trade, supported by a weaker U.S. dollar and Treasury yields after the Fed signaled that the woes in the banking sector might bring its tightening cycle to an end earlier than expected. "Wall Street will have to deal with further banking turmoil and that should keep safe-haven flows coming to gold," Oanda's senior market analyst Edward Moya said in a note. He reckoned that credit conditions are tightening, which should spell trouble for stocks. "Gold's on a mission to recapture the $2,000 level and shortly after that a possible run to record territory," he added. Spot gold rose 0.1% to $1,971.03/oz.
OIL SUMMARY
Oil was lower in early Asian trade, pulling back from overnight gains. Focus was on the impact of the Fed's 25bp hike and policy path forward. Though some concerns persist about banking turmoil sparking recession, analysts see some positives ahead. Oanda's senior market analyst Edward Moya sees signs that the oversold oil market is stabilizing, noting that exports have surged and EIA data showed rebounding demand across crude oil, gasoline, and distillates. ANZ also highlighted strong exports in the EIA report and declining domestic fuel stockpiles. It noted that Fed Chair Powell's warning that recent developments could tighten credit conditions sparked gains in crude on the prospect of a rate-hike pause. Front-month WTI futures dropped 0.9% to $70.26/bbl; front-month Brent fell 0.7% to $76.13/bbl.
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(END) Dow Jones Newswires
03-22-23 2316ET
