Asian Shares Follow Wall-Street in Decline following Fed Statement
Shares in Asia-Pacific fell on Thursday following an overnight plunge on Wall Street that wiped out the S&P 500′s 2021 gains and left it in negative territory for the year.
Mainland Chinese stocks dropped on the day, with the Shanghai composite down 1.91% to 3,505.18 while the Shenzhen component declined 3.248% to about 14,913.21.
Hong Kong’s Hang Seng index shed 2.55% to close at 28,550.77. Shares of airline Cathay Pacific plummeted 9.71% after the firm said Thursday it would issue convertible bonds worth 6.74 billion Hong Kong dollars ($869.36 million).
In Japan, the Nikkei 225 declined 1.53% to close at 28,197.42 while the Topix index shed 1.14% to finish its trading day at 1,838.85.
Japan’s retail sales declined 0.3% year-on-year in December, according to data released by the country’s Ministry of Economy, Trade and Industry. That compared against a median market forecast for a 0.4% decline, according to Reuters.
South Korea’s Kospi also fell 1.71% to end its trading day at 3,069.05. Shares in Australia declined, with the S&P/ASX 200 dropping 1.93% to close at 6,649.70.
In Southeast Asia, Vietnam’s VN-Index plummeted 6.67% to 1,023.94 on Thursday. The country confirmed its first outbreak of the coronavirus in nearly two months on Thursday, Reuters reported.
MSCI’s broadest index of Asia-Pacific shares fell 2.19%.
The losses in Asia-Pacific came on the back of overnight losses stateside, with the S&P 500 falling 2.6% to close at 3,750.77 — its biggest drop in three months. The Dow Jones Industrial Average saw its worst day since Oct. 28, plummeting 633.87 points to finish its trading day at 30,303.17. The Nasdaq Composite shed 2.6% to close at 13,270.60.
The U.S. Federal Reserve left its benchmark interest rate anchored near zero following the conclusion of its two-day meeting Wednesday. The Fed also said it will keep buying at least $120 billion of bonds a month.
In his post-meeting news conference, Fed Chairman Jerome Powell said: “The economy is a long way from our monetary policy and inflation goals, and it’s likely to take some time for substantial further progress to be achieved.”
Shares to Watch in Asia
Shares of Apple suppliers in Asia were mixed in Thursday trade. In Japan, Murata Manufacturing dropped 3.97% while LG Display in South Korea rose 0.44%.
In Taiwan, shares of contract manufacturer Hon Hai Precision Industry — better known as Foxconn — declined 3.66% while Taiwan Semiconductor Manufacturing Company slid 2.28%.
The moves came after Apple reported its largest quarter by revenue of all time on Wednesday.
Meanwhile, Hong Kong-listed shares of tech behemoth Alibaba fell 3.23%. Wall Street Journal reported, citing sources, that Alibaba affiliate Ant Group is planning to turn itself into a financial holding company overseen by China’s central bank.
The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 90.814 after an earlier high of 90.805.
The Japanese yen traded at 104.30 per dollar after weakening from levels below 103.8 against the greenback yesterday. The Australian dollar changed hands at $0.7602 following yesterday’s slip from levels above $0.772.
Oil prices were lower in the afternoon of Asia trading hours, with international benchmark Brent crude futures down 0.45% to $55.56 per barrel. U.S. crude futures slipped 0.62% to $52.52 per barrel.