It was a tough day for the stocks in the Asia Pacific. One day earlier, the U.S. Federal Reserve indicated that it plans to keep the interest rates near zero through 2022. This news affected the stocks.
Interestingly, shares in Australia were among the biggest losers regionally with S&P/ASX 200 dropping 3.05% to close at 5,960.60.
Unfortunately, Japanese stocks also fell on Thursday. The Nikkei 225 dropped 2.82% to close at 22,472.91. At the same time, the Topix index fell 2.2% to close at 1,588.92.
Moreover, South Korea’s Kospi index dropped 0.86% to end its trading day at 2,176.78.
Also, Singapore’s Straits Times Index fell 3.56% in the afternoon trade.
Importantly, Hong Kong’s Hang Seng index fell 2.27% to finish its trading day at 24,480.15. Shares of Chinese internet giant NetEase jumped in their Hong Kong debut on June 11. Moreover, shares soared by more than 5% from their issue price.
Mainland Chinese stocks also fell on June 11. The Shanghai Composite fell 0.78% to around 2,920.90. In the meantime, the Shenzhen Component dropped 0.814% to approximately 11,243.62.
Stocks and the U.S. economy
Investors are closely monitoring the situation around the world. It means that even a minor decision could affect investor sentiment. Moreover, the U.S. Federal Reserve is a powerful organization. As a reminder, the U.S. has the largest economy in the world. All of the factors mentioned above underlines the importance of the Federal Reserve.
On Wednesday, the Federal Reserve made the decision to keep interest rates unchanged and this decision had a negative impact on the stocks in Asia. Interestingly, Federal Reserve indicated it does not expect to raise interest rates through 2022.
Also, the Fed expects the U.S. economy to contract by 6.5% in 2020. Hopefully, the U.S. economy will expand in 2021, as the Fed expects the economy to grow by 5% in 2021.
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