Asian markets are broadly positive as the Federal Reserve has finally unveiled its take on future monetary policy. Also, the rise in oil prices is adding to bullish sentiment across Asian economies except Japan, where equities lost momentum due to the surge in the yen.
Rate hike clarity
At the conclusion of its meeting yesterday, the Fed maintained rates in between 0.25% and 0.50%, but trimmed the probability of number of rate hikes to two from four. The statement from the Central Bank came as a big relief to the markets, which have been anxious over the scale and extent of the rate hikes to be undertaken by the bank.
The latest commentary seemed far more dovish than what the market had anticipated and led a rally across commodities, currencies and emerging market economies. During the late Asian hours, China’s Shanghai SE Composite Index finished 1.20% higher at 2,904.83, and the Hang Seng closed 1.21% higher at 20,503.81. Japan’s Nikkei 225 had shed 0.22% to 16,936.38 while Taiwan TSEC 50 Index rose 0.41% to 8,734.54. India’s Mumbai Sensex too lost 0.17% to 24,641.64 during the day.
European equities slip
On the other hand, European equities slipped after beginning the day on a positive note. The Fed commentary had helped uplift sentiment, but that soon vanished later in the day. The euro’s strength was also weighing over equities. A strengthening euro makes it harder for European companies to export goods overseas.
Britain’s FTSE 100 fell 0.09% to 6,170.22 and Euronext 100 posted a loss of 0.74% to 865.21. France’s CAC 40 slipped 0.72% to 4,430.97 and Germany’s DAX fell 1.17% to 9,866.59 during the day. The Swiss Market Index erased 0.97% to 7,839.90 during the early European hours.
Meanwhile, U.S. stock markets reported substantial gains a day earlier. The Dow Jones Industrial Average closed 0.43% up at 17,325.76 and S&P 500 Index rose 0.56% to 2,027.22 as investors cheered the Fed’s decision. US markets are looking towards a flat open this morning.