SEOUL, South Korea – Asian stock markets were mostly lower Thursday after the Federal Reserve cuts its forecast for U.S. economic growth, a move that could delay Fed rate hikes but also suggests reduced American demand for Asia's exports.
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KEEPING SCORE: Tokyo's Nikkei 225 fell 1.1 percent to 19,990.82 and Hong Kong's Hang Seng was down 0.3 percent to 26,663.65. Australia's S&P/ASX 200 was down 1.3 percent to 5,524.90. South Korea's Kospi outperformed the region, rising 0.3 percent to 2,041.88. Stocks in mainland China and Singapore declined.
THE FED: The Federal Reserve left interest rates unchanged as expected and said in a statement after its latest policy meeting that it wants to see further economic gains and higher inflation before raising interest rates from record lows. The policymakers, while noting a strengthening U.S. economy, sharply lowered their estimate of growth this year, from a range of 2.3 percent to 2.7 percent estimated in March to a range of 1.8 percent to 2 percent. The downgrade reflects the economy's contraction in the January-march quarter, which resulted in part from a brutal winter.
ANALYST'S TAKE: "While the decision not to raise interest rates this time was as expected, the decision to cut its GDP forecast for the second time in a row suggested to the markets that U.S. economic growth is still less than expected," Nicholas Teo, an analyst at CMC Markets, said in a commentary. "This cut in the GDP forecast pretty much rules out an interest rate hike in July and makes September unlikely unless the economy turns around in a big way soon."
WALL STREET: Stocks edged higher Wednesday. The Dow Jones industrial average gained 0.2 percent to 17,935.74. The Standard & Poor's 500 rose 0.2 percent to 2,100.44. The Nasdaq composite added 0.2 percent to 5,064.88.
ENERGY: Benchmark U.S. crude fell 47 cents to $59.45 per barrel in electronic trading on the New York Mercantile Exchange. The contract closed up 5 cents at $59.92 per barrel in New York on Wednesday. Brent crude, a benchmark for international oil, declined 12 cents to $63.75 in London.
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CURRENCIES: The dollar weakened to 122.99 yen from 123.58 yen on Wednesday. The euro strengthened slightly to $1.1361 from $1.1350.