This week, the U.S. Federal Reserve made the decision, not to change interest rates. Every decision made by this organization has the potential to affect stocks around the world. That’s exactly what happened on Thursday. It makes sense as investors are closely monitoring the situation and even a minor decision could affect investor sentiment.
Importantly, the U.S. Federal Reserve is a powerful organization. As a reminder, the U.S. has the largest economy in the world.
Moreover, Federal Reserve indicated it does not expect to raise interest rates through 2022.
The central expects the U.S. economy to contract by 6.5% in 2020. Hopefully, next year the U.S. economy will get back on track, as the Fed expects the economy to grow by 5% in 2021.
Stocks in Asia and Federal Reserve
Stocks in the Asia Pacific fell on June 11. As stated above the U.S. Federal Reserve decided to keep the interest rates unchanged and indicated that it plans to keep the interest rates near zero through 2022. This news affected the stocks.
Shares in Australia were among the biggest losers in the region with S&P/ASX 200 dropping 3.05% to close at 5,960.60.
Japanese stocks also fell on Thursday. The Nikkei 225 fell 2.82% to close at 22,472.91. At the same time, the Topix index dropped 2.2% to close at 1,588.92.
Also, South Korea’s Kospi index fell 0.86% to end its trading day at 2,176.78.
Unfortunately, Hong Kong’s Hang Seng index dropped 2.27% to finish its trading day at 24,480.15. It is worth mentioning that shares of Chinese internet giant NetEase jumped in their Hong Kong debut on June 11. Interestingly, shares soared by more than 5% from their issue price.
Last but not least, mainland Chinese stocks also fell on June 11. The Shanghai Composite dropped 0.78% to around 2,920.90. In the meantime, the Shenzhen Component fell 0.814% to approximately 11,243.62.
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