Korean Shares Hit Record High With Asian Stocks Widely Down

By Ese Erheriene Features Dow Jones Newswires

Asian stocks tilted lower, with Australian stocks continuing to lag behind, as investors were largely unmoved by an as-expected policy announcement from the Federal Reserve.

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Korea's Kospi was a lone standout on the upside. The equities index topped 2011's record high to continue a strong recent run as foreign money flows into the market. The Kospi, up 0.6% Thursday, rose 11 of the past 14 sessions.

However, bearish sentiment around Australian banks persists as earnings season rolls on. Though National Australia Bank is up slightly following its fiscal first-half report, peers continued to decline after Tuesday's downbeat results from Australia and New Zealand Banking amid competitive pressures cast a pall. It is down for a third session, dropping 1.5%.

Mining, though, added to Thursday's weakness amid an overnight decline in metals prices--highlighted by copper's 3% slide, the biggest one-day drop since July 2015. Mining stocks declined as much as 4%.

The S&P/ASX 200 was recently down 0.4% after a 1% drop Wednesday, the index's biggest in six weeks.

With the Japan market again closed for a holiday, other markets were also modestly down.

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"The key over the coming weeks will be the economic data from the U.S.," said Lee Ferridge, head of multiasset strategy for North America at State Street Global Markets. He added that the Fed will be watching negotiations over a U.S. tax plan and that if economic data don't worsen and tax-deal prospects remain in tact, the market would likely price in a June increase in the Fed's interest rate.

Fed-fund futures indicate a 72% probability of a quarter-point increase at next month's Fed meeting, according to CME data.

The dollar rose broadly after Wednesday's Fed statement, in which policy wasn't changed. Levels were little changed in early Asian trading Thursday from late New York levels. That includes the euro hitting a one-week low against the dollar ahead of Sunday's final-round presidential vote in France.

But the common currency remains solidly above where it was before last week's first round. Euro-dollar "is just simply not expressing a view that we are going to see Le Pen take the presidency on Monday, which of course would promote a near-Armageddon scenario," said Chris Weston, chief market strategist at IG Group.

Write to Ese Erheriene at ese.erheriene@wsj.com

(END) Dow Jones Newswires

May 03, 2017 22:40 ET (02:40 GMT)