Asian shares mixed after Fed raises interest rates

Elaine Kurtenbach, The Associated Press</span>
Published Thursday, March 22, 2018 4:53AM EDT

BANGKOK -- Shares were mixed in Asia on Thursday after U.S. stock indexes finished with small losses following the Federal Reserve's interest rate hike.

KEEPING SCORE: Japan's Nikkei 225 index gained 1.0 per cent to 21,591.25 while the Kospi in South Korea added 0.4 per cent to 2,494.09. Hong Kong's Hang Seng dropped 0.2 per cent to 31,361.14 and the Shanghai Composite index lost 0.5 per cent to 3,263.77. Australia's S&P ASX 200 fell 0.2 per cent to 5,937.20. Shares were mixed in Southeast Asia.

WALL STREET: Major U.S. stock indexes fell Wednesday while smaller companies fared better. The Federal Reserve raised interest rates, as investors expected, and said it could raise rates at a quicker pace next year. The Dow Jones industrial average climbed 250 points, but gave it all up as new Fed Chairman Jerome Powell addressed reporters. The Fed said the U.S. economy and the job market continued to improve over the last two months. It still expects to raise interest rates three times this year, and said it might raise rates three more times next year instead of two. The S&P 500 index slid 0.2 per cent to 2,711.93. The Dow Jones industrial average lost 0.2 per cent to 24,682.31. The Nasdaq composite fell 0.3 per cent to 7,345.29.

ANALYST VIEWPOINT: "The market will have to get to know Jerome Powell a little bit and will have to test his credibility as Fed chairman," said Brent Schutte, the chief investment strategist for Northwestern Mutual Wealth Management. "I would imagine the bar is higher for him in the shorter term because he is not a trained economist," unlike Janet Yellen and other predecessors.

FOLLOWING THE FED: As usual, Hong Kong's de facto central bank moved in lockstep with the Fed to raise rates. The Hong Kong Monetary Authority said it was increasing its base rate by 25 basis points to 2 per cent. The southern Chinese financial centre is forced to move in line with U.S. monetary policy because its currency is pegged to the dollar.

ENERGY: Benchmark U.S. crude rose 8 cents to $65.25 per barrel in electronic trading on the New York Mercantile Exchange. It gained $1.63, or 2.6 per cent, to $65.17 a barrel on Wednesday. Brent crude, used to price international oils, shed 5 cents to $69.02 per barrel. It added $2.05, or 3 per cent, to $69.47 a barrel in London.

CURRENCIES: The dollar fell to 105.90 yen from 106.05 yen. The euro rose to $1.2347 from $1.2340.

AP Markets Writer Marley Jay contributed to this report. He can be reached at http://twitter.com/MarleyJayAP

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