Asia report: Markets mixed as Fed stands pat on rates

2nd May 2024 10:03

(Sharecast News) - Asia-Pacific stock markets finished with a mixed performance on Thursday, following the US Federal Reserve's decision to maintain interest rates at the end of its two-day meeting overnight.

Fed chair Jerome Powell's assurance of no immediate rate hikes alleviated some concerns, however, over the central bank's ability to manage inflation.

"In Asian trade, equities mostly climbed following remarks from Fed chair Powell following the latest US Federal Reserve policy meeting," said TickMill market analyst Patrick Munnelly.

"Powell's comments dampened speculation about an imminent interest rate hike, despite acknowledging recent robust data and a halt in disinflation trends."

Munnelly noted that Powell hinted at continued policy restraint, suggesting that any cuts could take longer than previously expected.

"While his stance was more assertive than the Fed's March update, it fell short of the hawkishness feared by the markets."

Markets mixed in wake of US Fed's rate decision

In Japan, the Nikkei 225 edged down by 0.1% to reach 38,236.07, while the Topix saw a marginal decline of 0.03%, settling at 2,728.53.

Leading the fallers on Tokyo's benchmark was Sumitomo Dainippon Pharma, down 6.75%, followed by CyberAgent, off 4.09%, and Mazda Motor, which lost 3.24%.

Chinese markets remained closed due to the extended Labour Day holiday, which since 2020 has been extended to the nearest weekend to make for a five-day break.

Hong Kong's Hang Seng Index jumped 2.5% to 18,207.13, with Country Garden Services rising 13.07%, Alibaba Health Information Technology adding 10.81%, and JD Health International advancing 10.68%.

In South Korea, the Kospi index experienced a slight decrease of 0.31%, closing at 2,683.65.

Major decliners in Seoul included Hankook Tire, down 7.45%, and Hyundai Heavy Industries, which lost 4.6%.

Australia's S&P/ASX 200 saw a modest increase of 0.23%, reaching 7,587.00, led higher by Pexa Group and Qube Holdings, which rose 10.95% and 6.71%, respectively.

New Zealand's S&P/NZX 50 index edged up by 0.05% to 11,874.04, with KMD Brands rising 3.92% and Westpac Banking Corporation ahead 2.88% in Wellington trading.

In currency markets, the yen was last trading at JPY 155.04 against the dollar, making for its highest level in 11 days.

Japanese authorities were suspected to have intervened to support the currency after recent lows, although no official statement had been made as yet.

The greenback was meanwhile -0.25% weaker against the Aussie at AUD 1.5292, while it retreated 0.14% from the Kiwi to change hands at NZD 1.6842.

Oil prices showed modest gains, with Brent crude futures last up 0.91% on ICE at $84.20 per barrel, and the NYMEX quote for West Texas Intermediate climbing 0.85% to $79.67.

Consumer prices rise more slowly in Korea

In economic news, fresh official data showed South Korea's consumer prices experiencing a slower pace of increase in April compared to March on a year-on-year basis.

The consumer price index (CPI) registered a 2.9% rise on the year, down from a 3.1% uptick in March.

Tht fell short of expectations, with a Reuters poll of economists anticipating a 3% gain.

Core CPI, which excludes volatile food and energy prices, saw a more moderate increase of 2.3%, slightly slower than the 2.4% rise recorded in March.

In a separate development, South Korea unveiled guidelines for companies interested in participating in the government's 'Corporate Value-Up' programme, which was intended to address the perceived undervaluation of the Korean stock market, often referred to as the 'Korea Discount'.

According to CNBC, the Financial Services Commission (FSC) outlined the guidelines, emphasising the importance of companies focusing on mid-to-long-term objectives and plans to enhance shareholder returns.

"In addition to regulatory reform initiatives in our capital markets that the government has made over the past two years, listed companies' value enhancement efforts will help Korea's stock market tackle Korea discount and rise steadily over mid-to long-term," said Soyoung Kim, vice-chairman of the FSC.

Reporting by Josh White for Sharecast.com.