GLOBAL MARKETS DJIA 34168.09 -129.64 -0.38% Nasdaq 13542.12 2.82 0.02% S&P 500 4349.93 -6.52 -0.15% FTSE 100 7469.78 98.32 1.33% Nikkei Stock 26382.57 -628.76 -2.33% Hang Seng 23807.40 -482.50 -1.99% Kospi 2638.69 -70.55 -2.60% SGX Nifty* 16922.00 -342.0 -1.98% *Feb contract USD/JPY 114.58-59 -0.08% Range 114.78 114.48 EUR/USD 1.1229-32 -0.09% Range 1.1245 1.1227 CBOT Wheat March $7.950 per bushel Spot Gold Nymex Crude (NY) $86.60 $1.00 US STOCKS
U.S. stocks gave up their gains after the Federal Reserve signaled intentions to raise interest rates in mid-March, offering the most-detailed vision yet of its plan to address rising inflation.
The Fed's statement indicated approval of a final round of asset purchases, bringing its stimulus program to a conclusion by March. "It will soon be appropriate to raise the target range for the federal-funds rate," the statement said.
Stocks turned lower during Fed Chairman Jerome Powell's press conference, which followed the statement. The S&P 500 slipped 0.15% following the Fed's afternoon announcement. The broad index has declined in five of the past six trading days.
The tech-focused Nasdaq Composite Index edged less than 0.1% higher, while the Dow Jones Industrial Average fell about 0.4%.
ASIAN STOCKS
Japanese stocks were lower, dragged by falls in tech and electronics stocks, following the Fed's signals for tightening. Earnings are in focus, with Shin-Etsu Chemical and Canon Inc. scheduled to report their results later in the day. The Nikkei Stock Average was 0.3% lower at 26931.44.
South Korea's benchmark Kospi fell 0.9% to 2684.97 in early trade, dragged by energy, steel and biotech stocks, with the Fed signaling its intention to raise interest rates in mid-March weighing on investor sentiment. Geopolitical tensions over Ukraine and the fast-spreading Omicron variant also sapped risk appetite.
Hong Kong's Hang Seng Index fell 1.4% to 23952.01 on the Fed signaling its intention to raise rates in mid-March. While Fed Chair Powell said there was room for rate hikes and a will to reduce a substantial amount of balance sheet, he didn't specify the pace of tightening, which could bring more uncertainties to the market, KGI Securities said. It expects local stocks to consolidate today, while Chinese technology stocks could fall following a weak performance in the U.S. market. The Hang Seng Tech Index declined 2.2% to 5471.50.
Chinese stocks fell, as the market continued a rangebound trading pattern so far this week. The benchmark Shanghai Composite Index shed 0.5% to 3437.33, while the Shenzhen Composite Index was down 1.0% at 2304.88. The ChiNext Price Index declined 1.0% to 2973.05. China Fortune Securities said the downturn is likely a result of investors' tendency to cash out ahead of the Lunar New Year holidays. But the brokerage thinks market fundamentals show that most risk factors, including the Fed's plans to raise interest rates, have been priced in, and a recovery could be expected after the holidays.
FOREX
Asian currencies weakened against the U.S. dollar after Fed Chairman Jerome Powell on Wednesday signaled the U.S. central bank is ready to raise rates at its March meeting and could continue to lift them quicker than it did during the past decade. The USD Index has yet to fully price in yield support that has formed in the past several months, let alone what may be in store in the coming months, Westpac said. The ICE USD Index climbed 0.7% to 96.58. USD/KRW rose 0.3% to 1,202.83, USD/SGD gained 0.2% to 1.3499 and AUD/USD slipped 0.6% to 0.7075.
METALS
Gold edged lower after the FOMC laid out plans for an interest-rate rise in March. "Powell's hawkish press conference sent gold to fresh lows as the Fed laid out the possibility of a much more aggressive balance sheet reduction," Oanda said. Growing risk appetite among investors are also putting downward pressure on safe-haven assets, it added. However, rising geopolitical risks remain, so "the path higher for gold is there, but it will likely be a tough grind higher," Oanda said. Spot gold was recently 0.2% lower at $1,816.21.
OIL SUMMARY
Oil prices may only rise by $2/bbl as a fallout of ongoing Russia-Ukraine tensions, given that only a limited quantity of undivertible pipeline volume will be affected, Goldman Sachs said. The investment bank also believes Western oil sanctions against Russia seem improbable, amid a potential retaliation by Russia on its gas exports to Europe, where natural gas inventories are already tight. Both front-month Brent and WTI were 0.7% lower, at $89.31/bbl and $86.75/bbl, respectively.
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(END) Dow Jones Newswires
01-26-22 2215ET
