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Asian markets are retreating as the Fed plans to remain in place for the next few years



Tourists cruising the Huangpu River pass by the Shanghai Tower. Shares in Shanghai fell on Thursday.

Getty images

Asian stock markets fell on Thursday after the US Federal Reserve showed that the interest rate will remain close to zero at least until 2023, but did not announce additional stimulus plans.

The Shanghai Composite Index SHCOMP,
-0.80%
losses 1% and Nikkei 225 NIK,
-0.68%
in Tokyo sank by 0.7%. Hang Seng HSI,
-1.45%
in Hong Kong fell 1.8%.

Kospi 180721,
-1.41%
in Seoul gave up 1.4%, while the S&P / ASX 200 XJO in Sydney,
-1.16%
decreased by 1.1%. Stocks in New Zealand NZ50GR,
-0.31%,,
Taiwan Y9999,
-0.95%,,
Indonesia JAKIDX,
-0.21%
and Singapore STI,
-0.18%
retreated too.

The Wall Street S&P 500 benchmark closed at 0.5% after the Fed said it would not raise interest rates until inflation reached 2%, which the US Federal Reserve estimates is expected by the end of 2023.

President Jerome Powell promised the Federal Reserve “we will not lose sight of the millions of Americans who are out of work,” but gave no indication of new incentives.

Markets “hoped the Fed would release money from policies where the mouth is,” but “ultimately disappointed,” a Mizuho Bank report said. The Fed was “long in conversation and short in action.”

Global markets have recovered most of this year’s losses, exacerbated by central bank lending to troubled economies and hopes for a coronavirus vaccine.

However, forecasters warn that the recovery may be too great and fast to be supported by precarious economic activity.

U.S. investors are counting on Congress for a new support package after the expiration of additional unemployment benefits that help support consumer spending, but lawmakers are at a dead end of its possible size.

S&P 500 SPX,
-0.46%
fell to 3,385.49. Dow Jones Industrial’s average DJIA,
+ 0.13%
rose by 0.1% to 28,032.38. Nasdaq composite COMP,
-1.25%
lost 1.3% to 11,050.47.

Powell said the US economy has recovered faster than

The Fed predicts the economy will shrink by 3.7% this year, up from a 6.5% decline in June. The Federal Reserve forecasts an unemployment rate at the end of the year of 7.6% instead of 9.3% forecast in June.

“Full economic recovery is unlikely until people are sure it is safe to re-engage in a wide variety of activities,” Powell said.

In the energy markets, compare US crude oil for delivery in October CLV20,
-1.32%
lost 28 cents to $ 39.88 a barrel in e-commerce on the New York Mercantile Exchange. The contract rose $ 1.88 on Wednesday to $ 40.16. Brent crude for delivery in November BRNX20,
-1.11%
threw 22 cents to $ 42 a barrel in London. He won $ 1.69 from the previous session to $ 42.22.

The dollar USDJPY,
+ 0.08%
fell to 105.04 yen from 105.01 yen on Wednesday.


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