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SINGAPORE (AP) - Asian markets were mixed on Thursday after the U.S. Federal Reserve lifted its key interest rate as expected for the third time this year.
KEEPING SCORE: Japan’s Nikkei 225 dropped 0.8 percent to 23,827.25. South Korea’s Kospi, which reopened after a national holiday, added 0.4 percent to 2,348.87. Hong Kong’s Hang Seng index slipped 0.4 percent to 27,702.82. The Shanghai Composite Index lost 0.5 percent to 2,793.30. Australia’s S&P; ASX 200 was less than 0.1 percent lower at 6,189.70. Shares fell in the Philippines but rose in Taiwan, Singapore and Indonesia.
WALL STREET: Major U.S. indexes fell after the Fed pushed interest rates higher as expected. Stocks initially climbed after the announcement, but the gains faded as a drop in Treasury yields hurt financial stocks. The S&P; 500 index dropped 0.3 percent to 2,905.97 after being as much as 0.5 percent higher earlier in the day. The Dow Jones Industrial Average fell 0.4 percent to 26,385.28. The Nasdaq composite was 0.2 percent lower at 7,990.37.
U.S. RAISES INTEREST RATE: On Wednesday, the Fed signaled its confidence in the U.S. economy by raising a key interest rate for a third time this year. It lifted its short-term rate - a benchmark for many consumer and business loans - by a modest quarter-point to a range of 2 percent to 2.25 percent. Hong Kong has adjusted its base interest rate to match the move, and other Asian economies which have their currencies pegged to the dollar may soon follow suit. Chairman Jerome Powell said this did not amount to a policy change. The Fed also forecasted another rate hike by end 2018 and predicted that it will continue to tighten credit into 2020 to manage growth and inflation.
ANALYST’S TAKE: “The Fed raised rates as expected but stopped referring to its policy as ‘accommodative’, which could signal that it is nearing the end of its tightening cycle,” said Song Seng Wun, an economist at CIMB Private Banking. “While there are risks from trade fights, there is a sense of reassurance that growth remains resilient for now,” he added.
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