Stocks in Asia traded mixed on Friday morning as investors grappled with the consequences of a recent change in interest rate outlook at the U.S. Federal Reserve.
The mainland Chinese markets declined in early trade, with the Shanghai composite declining more than 0.1 percent and the Shenzhen component slipping slightly. The Shenzhen composite fell 0.16 percent.
Hong Kong’s Hang Seng index rose 0.49 percent, with shares of Chinese tech giant Tencent jumping more than 1 percent despite the company reporting its slowest annual profit growth in 13 years.
The broad MSCI Asia ex-Japan index rose 0.44 percent to 532.44, as of 9:48 a.m. HK/SIN.
Japan’s Nikkei 225 shed its earlier gains to trade fractionally lower in the morning, as shares of index heavyweight Fast Retailing fell more than 0.8 percent. The Topix index was largely flat.
Over in South Korea, the Kospi rose 0.14 percent. Shares of tech heavyweight Samsung Electronics and chipmaker SK Hynix saw their stock jump more than 1 percent each, maintaining their Thursday momentum following an overnight skyrocket in Micron shares stateside after the company signaled that a recovery in the memory chip sector is coming later in the year.
Meanwhile, shares in Australia gained as the ASX 200 advanced 0.88 percent, with almost all the sectors in positive territory.
“It certainly feels like markets will need a few more days and sessions to interpret the recent change in Fed positioning and to absorb the further developments with regard to trade and geo-political factors, investors will be hoping for more smooth trading conditions in the weeks ahead but at the moment, it doesn’t look like they are going to get them,” analysts at Rakuten Securities Australia said in a note.
In overnight market action stateside, the 30-stock Dow surged 216.84 points to close at 25,962.51 and the S&P 500 ended its trading day 1.1 percent higher at 2,854.88. The Nasdaq Composite also saw gains as it rose 1.4 percent to close at 7,838.96.
The moves upward in the major stock indexes on Wall Street were driven by gains in the technology sector and the latest policy statement from the U.S. Federal Reserve.
On Wednesday, the Fed said it does not expect to raise rates at all in 2019. The central bank had forecast at least two rate hikes for this year back in December. The Fed added that it expects to end its balance-sheet reduction process by the end of September.
“Markets have continued to digest the implications of a dovish Fed that looks set to leave the Fed Funds rate unchanged this year and potentially next. Tech shares have led the gains in equities, although financials have continued to struggle,” Rodrigo Catril, a senior foreign exchange strategist at National Australia Bank, said in a morning note.
Treasury yields fell sharply on Wednesday, with the benchmark 10-year rate hitting its lowest level in a year. The yield traded at 2.53 percent on Thursday while the short-term 2-year rate held at 2.41 percent. Yields move inversely to prices.
The U.S. central bank did, however, lower its economic growth forecast for 2019, raising concerns over a possible slowdown in the economy.
The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 96.340, slipping from earlier levels but still off lows below 96.0 seen yesterday.
The Japanese yen traded at 110.68 against the dollar after touching highs below 110.5 in the previous session, while the Australian dollar changed hands at $0.7103 after slipping from highs above $0.716 yesterday.
Oil prices traded cautiously in the morning of Asian trading hours, with the international Brent crude futures contract slipping 0.16 percent to $67.75 per barrel and U.S. crude futures declining fractionally to $59.94 per barrel.
— CNBC’s Fred Imbert contributed to this report.
