Asian shares mixed as Fed hike gives investors few surprises
Asian stocks were mixed on Thursday after the Fed raised rates again, meeting investor expectations but providing few surprises.
KEEPING SCORE: Japan's benchmark Nikkei 225 index dipped 0.2 percent to 22,721.21 while South Korea's Kospi climbed 0.8 percent to 2,500.12. Hong Kong's Hang Seng rose 0.1 percent to 28,258.05 but the Shanghai Composite in mainland China lost 0.2 percent to 3,297.78. Australia's S&P/ASX 200 inched up 0.2 percent to 6,032.00.
FED RAISES: In a widely expected move, the Federal Reserve raised its benchmark rate for the third time this year, by increasing its short-term rate by a quarter point. Policymakers at the U.S. central bank said they plan to continue tightening and indicated that three more rate hikes are in store for 2018. The Fed also raised its growth forecast for the U.S. economy, the world's biggest, and predicted that the job market will continue improving. The dollar and U.S. Treasury yields fell on the news.
THE QUOTE: "Last night's market action suggests that currency and bond markets had built some risk premium into pricing for the Fed decision," said Ric Spooner, chief analyst at CMC Markets. "Stock markets, on the other hand, were already priced for a Goldilocks outcome."
CHINA RATE HIKE: China's central bank reacted to the Fed's interest rate increase by nudging up its own rate for lending to commercial banks. It left rates for borrowing by companies and the public unchanged. The People's Bank of China said it was responding to market forces by raising the rate charged on its one-year lending facility by a relatively small margin of 0.05 percentage points.
HONG KONG HIKE: The de facto central bank in Hong Kong copied the Fed's hike with its own rate rise. The Hong Kong Monetary Authority said it was raising its base rate by a quarter point, "with immediate effect." Because the Chinese financial hub's currency is pegged to the U.S. dollar, it has no choice but to track U.S. monetary policy.
WALL STREET: Major U.S. stock indexes finished mostly higher. The S&P 500 index slipped 0.1 percent to 2,662.85 after closing at all-time highs earlier in the week. The Dow Jones industrial average gained 0.3 percent to 24,585.43 and the Nasdaq added 0.2 percent to 6,875.80.
CURRENCIES: The dollar rose to 112.61 Japanese yen from 112.54 yen late Tuesday. The euro rose to $1.1837 from $1.1826.
ENERGY: Oil futures rebounded. Benchmark U.S. crude rose 15 cents to $56.75 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell 54 cents to settle at $56.60 per barrel on Wednesday. Brent crude, used to price international oils, added 35 cents to $62.79 per barrel in London.