European shares started the day on a sloppy note as most of the Asian counterparts finished lower after the Bank of Japan’s posted a negative outlook on the country’s economy. The Central Bank did not change the interest rate and projected that the economy might grow at a pace slower than its last estimate in January. Also, the added weakness in the oil prices also pushed the equities lower while the safe asset yen registered a rally.
BOJ set gloomy tone
Resultantly, most of the indices in Asia closed in red except China’s Shanghai SE Composite Index. Australia ASX All Ordinaries closed 1.41% lower at 5,168.60 while Hang Seng finished at 20,288.77, down by 0.72%. Nikkei 225 shed 0.68% to 17,117.07 and Taiwan TSEC 50 lost 1.56% to 8,611.18.
Meanwhile, the scenario was no different in Europe, where all of the major indices slipped into red following the Bank of Japan’s gloomy view of the economy. The plunge in oil prices further sparked the bearish sentiment in the markets. FTSE 100 dived down by 0.61% to 6,137.17 while Euronext 100 posted a loss of 0.57% to 873.50 during the early trading hours. France’s CAC 40 and Germany’s DAX had shed 0.61% and 0.44% to 4,479.27 and 9,945.86 respectively. Swiss Market Index fell 0.54% to 7,974.94 during the later Asian hours.
Fed’s meeting crucial for markets
After the Bank of Japan’s commentary, the eyes are set on the upcoming Federal Reserve’s policy meet. Though the chances are bleak that the Fed will hike rates early, the expectations have grown stronger as the economy in the U.S. has improved over the last few months.
During the previous day, the U.S. stock markets had finished mostly lower as oil prices and an impending decision by the BOJ weighed on the markets. Dow Jones Industrial Average closed 0.09% higher at 17,229 while S&P 500 Index lost 2.55 points to 2,019.64. The statement from the OPEC ( Organisation of the Petroleum Exporting Countries) that the demand for oil is expected to be lower than previously estimated eclipsed the sentiment across the U.S. markets.