Asian stocks retreat on lack of new Fed action
Asian stock markets tumbled Thursday after the U.S. Federal Reserve indicated its benchmark interest rate will stay close to zero at least through 2023 but announced no additional stimulus plans.
Market benchmarks in Shanghai, Tokyo, Seoul and Hong Kong all retreated.
On Wednesday, Wall Street's benchmark S&P 500 index closed down 0.5% after the Fed said it won't raise interest rates until inflation reaches 2%, which the U.S. central bank's own projections show it doesn't expect until late 2023.
Chairman Jerome Powell promised the Fed “we will not lose sight of the millions of Americans that remain out of work” but gave no indication of new stimulus.
Markets “hoped for the Fed to put policy money where the mouth is” but "ended up a tad disappointed,” Mizuho Bank said in a report. The Fed was “long on talk and short on action.”
Also Thursday, the Japanese central bank left its interest rates unchanged and gave no indication about possible additional stimulus.
The Shanghai Composite Index lost 1% to 3,215.47 and the Nikkei 225 in Tokyo sank 0.7% to 23,321.33. The Hang Seng in Hong Kong retreated 1.6% to 24,327.67.
The Kospi in Seoul shed 1.4% to 2,399.96 while Sydney's S&P-ASX 200 declined 1.1% to 5,889.80.
India's Sensex opened down 0.2% at 39,210.14. New Zealand and Southeast Asia markets all retreated.
Global markets have recovered most of this year's losses, boosted by central bank infusions of credit into struggling economies and hopes for a coronavirus vaccine.
Forecasters warn, however, that the recovery might be too big and fast to be supported by uncertain economic activity.
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