Asian share markets gain, USA dollar weaker after Fed hike

Lucy Hill
March 18, 2017

Global stocks drifted lower on Tuesday as investors looked to the Federal Reserve's policy meeting for an expected interest rate increase and hints on future hikes.

In Japan, the Nikkei 225 fell 0.45%, while Australia's S&P/ASX 200 dipped 0.46%, as its gold sub-index went down 1.64% on expectations of a Fed rate hike dimming demand for the precious metal. Hong Kong's Hang Seng inched up 0.2 percent to 24,347.76, while the Shanghai Composite shed 0.3 percent to 3 3,260.62. Seoul jumped one percent and Singapore put on 0.4 percent, with Wellington, Manila and Taipei also well up.

Asian markets were mixed Friday as investors awaited a meeting of finance and economic ministers of the Group of 20 industrial countries. Britain's FTSE 100 inched up almost 0.1 percent to 7,418.84.

Most stock markets in Asia started the week on a high - tracking all three main Wall Street indexes - after the Labor Department said the economy created 235,000 new jobs in Feb, much more than estimated. Most investors expect it to raise rates for only the third time since they went to almost zero during the financial crisis in 2008.

China's central bank raised short-term interest rates following the USA rate increase. On the other hand, the Fed could raise interest rates from record lows at a pace faster than expected.

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Investors are looking for clues on how much the Fed plans to tighten monetary policy through this course of this year.

BUSY WEEK: The Bank of England, Bank of Japan and others around the world are also holding meetings this week. Many economists expect the Bank of England to hold steady. The British government meanwhile could formally begin the process of exiting the European Union.

"The progressive improvement in both labour market conditions and lift in inflation rates in the U.S. certainly validates the Fed's move this week", said Jingyi Pan, market analyst at IG in Singapore.

CURRENCIES: The dollar fell to 114.81 yen from 114.88 yen while the euro held steady at $1.065.

ENERGY: Benchmark U.S. crude added 11 cents to $48.86 a barrel. The contract fell 9 cents to close at $48.40 a barrel on Monday. Brent crude, which is used to price global oils, slipped 7 cents to $51.67 a barrel.

Other reports by TheDailyFarc

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