Asian stock markets traded in mixed territory as investors digested the US Federal Reserve’s latest monetary policy decision and its implications for global financial conditions.
The Fed held interest rates steady, keeping the federal funds rate target range at 5.25 to 5.50 percent, reinforcing its dual mandate of maximum employment and a 2 percent inflation target over the longer run.
Fed Chair Jerome Powell stated clearly that he doesn’t think it’s likely the central bank will reach that level of confidence by the time of the March meeting, effectively ruling out a near-term pivot.
Following Powell’s remarks, the probability of a 25 basis point rate cut in March dropped sharply to 36.5 percent, according to CME Group’s FedWatch Tool.
Australia’s benchmark S&P/ASX 200 snapped an eight-session winning streak, falling 86.70 points or 1.13 percent to 7,594.00, with technology, energy, and mining stocks leading the decline.
Among notable Australian movers, Resolute Mining dropped almost 6 percent, Fortescue Metals shed more than 2 percent, and Mineral Resources fell 3.5 percent as commodity sentiment weakened broadly.
In economic data, Australia’s manufacturing PMI climbed to 50.1 in January from 47.6 in December, crossing back above the boom-or-bust threshold of 50, according to a Judo Bank survey.
However, building approvals in Australia tumbled a seasonally adjusted 9.5 percent in December to 13,085, far below expectations for only a 0.5 percent decline, the Australian Bureau of Statistics reported.
Japan’s Nikkei 225 fell sharply, closing its morning session at 35,957.82, down 328.89 points or 0.91 percent, with financial stocks and index heavyweights among the biggest drags on the index.
Aozora Bank was among the most dramatic Japanese movers, plummeting 21.5 percent, while Sumitomo Pharma plunged more than 18 percent and M3 slid almost 13 percent during the session.
Japan’s manufacturing sector continued contracting in January, though at a marginally slower pace, with a Jibun Bank PMI reading of 48.0, slightly improved from December’s 47.9 but still below the 50 threshold.
Bucking the regional trend, Hong Kong gained 2.1 percent and South Korea added 1.3 percent, while New Zealand, China, and Indonesia each rose between 0.2 and 0.5 percent.
On Wall Street, the Nasdaq plunged 345.89 points or 2.2 percent to 15,164.01, the S&P 500 fell 79.32 points or 1.6 percent to 4,845.65, and the Dow slid 317.01 points or 0.8 percent to 38,150.30.
European markets also declined, with the UK’s FTSE 100 sliding 0.5 percent, Germany’s DAX falling 0.4 percent, and France’s CAC 40 dropping 0.3 percent in Wednesday’s trading session.
West Texas Intermediate crude oil futures for March fell $1.97 or 2.5 percent to $75.85 a barrel, pressured by unexpected growth in US crude inventories and continued weakness in Chinese manufacturing activity.
