Asian Shares Fall After Less Dovish Than Expected Rate Hike By Fed

asian martket down 121418 20dec18

Asian stocks fell on Thursday, as global growth worries persisted and markets were surprised by the Federal Reserve's commitment to tightening monetary policy despite rising risks to growth.

Chinese shares closed at two-month lows even though the country's central bank rolled out a new tool to support lending to small and private firms.

The benchmark Shanghai Composite Index ended down 13.30 points or 0.5 percent at 2,536.27, while Hong Kong's Hang Seng Index dropped 241.86 points or 0.9 percent to 25,623.53.

Japanese shares hit a 15-month low as the Fed sounded less dovish than hoped and the Bank of Japan maintained its ultra-loose monetary policy and reaffirmed its view on the economy, citing stagnant inflation and a looming consumption tax hike next year.

The Nikkei 225 Index plunged 595.34 points or 2.8 percent to 20,392.58, the lowest closing level since September of 2017. The broader Topix closed 2.5 percent lower at 1,517.16, the lowest closing level since April of 2017.

Shipping companies, electronics makers and technology companies fell sharply, with Tokyo Electron, Panasonic, Nippon Yusen and Mitsui OSK Lines tumbling 4-7 percent. SoftBank Corp. dropped 4.7 percent after losing 15 percent on the first day of listing the previous day.

Meanwhile, Takeda Pharmaceutical soared 7 percent after announcing the listing of ADRs on the New York Stock Exchange will commence on December 24th.

Australian markets fell sharply to hit a two-year low after the Fed's less dovish than expected statement. The benchmark S&P/ASX 200 Index tumbled 74.80 points or 1.3 percent to 5,505.80, while the broader All Ordinaries Index ended down 77.10 points or 1.4 percent at 5,572.90

Gold miners Evolution, Newcrest and St Barbara lost 2-5 percent as the dollar recovered following the Fed decision.

MYOB Group slumped 14 percent as U.S. private equity giant KKR & Co. cut its buyout price for the accounting software firm.

The big four banks fell between 0.7 percent and 1.6 percent, a day after chiefs at ANZ and NAB faced investor backlash over executive pay.

In economic news, Australia's jobless rate came in at a seasonally adjusted 5.1 percent in November. That exceeded expectations for 5.0 percent, which would have been unchanged from the October reading.

The Australian economy added 37,000 jobs last month, blowing away expectations for an increase of 20,000 jobs following the gain of 32,800 in the previous month.

Seoul stocks retreated as the prospects of more Fed rate hikes next year raised concerns over possible capital outflows. The benchmark Kospi dropped 18.72 points or 0.9 percent to 2,060.12. Tech heavyweights Samsung Electronics and SK Hynix fell 1.2 percent and 2.8 percent, respectively.

On the other hand, New Zealand shares edged up slightly as investors digested mixed readings on the economy. The benchmark S&P/NZX-50 Index edged up 10 points or 0.1 percent to 8,772.19.

While New Zealand's trade deficit narrowed in November on the back of a sharp rise in exports and easing imports, GDP growth slowed more than expected in the third quarter to mark the lowest quarterly growth since Q4 2013.

Overnight, U.S. stocks ended sharply lower after the Fed raised interest rates by a quarter point and forecast fewer than previously estimated rate hikes next year.

Investors were disappointed as the central bank's tone was not as dovish as some traders had hoped.

The Dow and the S&P 500 fell around 1.5 percent and the tech-heavy Nasdaq Composite shed 2.2 percent to close at their lowest levels in over a year.

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