Asian Stocks Await Federal Reserve Decision on Interest Rates
By Matt Coleman
Published January 31, 2024
Asian stocks were mixed as markets awaited a decision on interest rates by the Federal Reserve. The waiting game has caused fluctuations in stock prices across various Asian countries.
Market Performance Across Asia
In Japan, the Nikkei 225 added 0.6% to 36,286.71, while South Korea’s Kospi shed 0.1% to 2,497.09 following Samsung Electronics' reported annual 34% decline in operating profit for the last quarter. Hong Kong’s Hang Seng sank 1.6% to 15,460.78, and the Shanghai Composite shed 1.5% to 2,788.55. In Australia, the S & P/ASX 200 rose 1.1% to 7,680.70 after a survey showed Australia’s inflation rate fell to a two-year low in the December quarter.
China's Manufacturing Contracted
China reported that its manufacturing contracted in January for a fourth straight month, with the manufacturing purchasing managers index (PMI) rising to 49.2, still below the critical 50 mark that indicates expansion rather than contraction. Weak demand in the world's second largest economy is dragging on growth.
U.S. Stock Performance
In Wall Street, the S & P 500 slipped 0.1% from its record to 4,924.97, the Dow Jones Industrial Average gained 0.3% to 38,467.31, and the Nasdaq composite fell 0.8% to 15,509.90. Notable stock movements included UPS slumping 8.2%, Whirlpool sinking 6.6%, and General Motors jumping 7.8% after reporting stronger profit and revenue than expected.
Federal Reserve Interest Rate Expectations
Hopes for several cuts to interest rates by the Federal Reserve are circulating on Wall Street, with anticipation that a rate cut may arrive at its next meeting in March. Traders are closely monitoring the Federal Reserve's meeting for clues regarding potential rate cuts, which would mark a sharp turnaround from the Fed's recent rate hikes.
Bond and Energy Markets
Treasury yields were mixed in the bond market following reports that showed the economy remains stronger than expected. In energy trading, benchmark U.S. crude lost 33 cents to $77.49 a barrel, and Brent crude, the international standard, fell 36 cents to $82.14 per barrel. In currency trading, the U.S. dollar rose to 147.81 Japanese yen from 147.59 yen, while the euro cost $1.0818, down from $1.0845.
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