Stocks Extend Drop in Asia on Fed; Dollar Advances:
- Equity markets in Hong Kong, Japan and Australia decline
- Powell says Fed has ‘ways to go’; officials see rate above 5%
Shares extended declines in Asia as the Federal Reserve’s resolve to push interest rates higher for longer sapped appetite for risk taking.
The dollar climbed and the yuan fell as poor Chinese economic data added to downbeat sentiment in markets. While authorities have ended the Covid Zero policy that drove the weakness in China, the country is now struggling with a surge of infections.
Benchmark indexes in Japan, South Korea, China and Australia all slid Thursday, with notable falls in Hong Kong-listed technology companies. Futures contracts for the S&P 500 fluctuated after the gauge snapped a two-day rally Wednesday in a volatile session that saw shares end off their lows.
Fed Chair Jerome Powell said the central bank had a “ways to go” in its campaign to rein in inflation. Policy makers projected rates would end next year at 5.1%, a higher level than previously indicated and well above market projections.
“The Fed was decidedly more bearish than expected,” said Karen Jorritsma, head of Australian equities at RBC Capital Markets. “They will stay the course on inflation, making a hard landing almost a certainty.”
Source : Bloomberg