Asia report: Stocks mixed as Fed signals end of tightening cycle

(Sharecast News) - Asia-Pacific equity markets ended mixed on Thursday, with investors digesting the US Federal Reserve's move to end its interest rate hiking cycle overnight as it signalled cuts for next year. Earlier in the session, optimism spilt over from Wall Street, which rallied as the Fed held rates at between 5.25% and 5.5% for a third straight time and laid out the timeline for at least three 25-basis point cuts from next year.

"Following the Federal Open Market Committee (FOMC) decision to maintain unchanged rates and introduce a dovish adjustment to its statement guidance, most stocks in the Asia-Pacific region experienced gains," said TickMill market analyst Patrick Munnelly.

"The FOMC's decision to cut its 2024 median dot by more than anticipated, indicating a potential three rate cuts in 2024, contributed to the positive market sentiment.

"Fed Chair Powell's dovish tone during the press conference further supported the upward trend."

Initially, the Nikkei 225 saw an increase, but Munnelly said it struggled to sustain its gains due to losses in the banking sector and a strengthening yen.

"On the other hand, the Hang Seng and Shanghai Composite both opened higher, with the former benefiting from the Hong Kong Monetary Authority's decision to keep rates unchanged in alignment with the Fed.

"However, gains in the mainland were limited due to disappointing loans and aggregate financing data."

Markets finish mixed after solid start to trading

In Japan, the Nikkei 225 declined by 0.73% to close at 32,686.25, while the Topix index dropped by 1.43% to 2,321.35.

Leading the declines on Tokyo's benchmark were Mitsubishi Motors, down by 6.78%; Toho, with a 6.2% decrease; and Mazda Motor, which fell by 5.91%.

China's markets also experienced mixed performance, with the Shanghai Composite down 0.33% at 2,958.99 and the Shenzhen Component falling 0.62% to 9,417.97.

Notable losers included Beijing AriTime Intelligent Control, with a 10.02% decrease, and Cultural Investment Holdings, down by 8.02%.

Hong Kong's Hang Seng Index, on the other hand, gained 1.07% to reach 16,402.19, with the top-performing stocks including Techtronic Industries, up by 9.97%, CK Infrastructure with an 8.68% increase, and ENN Energy, which rose by 7.65%.

South Korea's Kospi index rose by 1.34% to 2,544.18, with Posco Future M posting a 7.53% gain and Kakao increasing by 6.68%.

In Australia, the S&P/ASX 200 climbed 1.65% to 7,377.90, with Charter Hall Group posting an 11.78% gain and IGO up 11.3%.

New Zealand's S&P/NZX 50 index saw a modest increase of 0.67%, closing at 11,552.88.

Arvida Group posted a 6.52% gain, and Fisher & Paykel Healthcare increased by 3.77%.

In currency markets, the dollar was last down 0.88% on the yen, trading at JPY 141.63.

The greenback lost 0.73% against the Aussie to AUD 1.4902, and it was off 0.57% against the Kiwi, changing hands at NZD 1.6102.

On the oil front, Brent crude futures were last up 1.8% on ICE at $75.60 per barrel, while the NYMEX quote for West Texas Intermediate rose 1.68% to $70.64.

Australia unemployment rate inches up in November

In economic news, Australia saw a slight uptick in its unemployment rate to 3.9% in November, compared to the revised figure of 3.8% in October.

That marked the highest unemployment rate for the country since May 2022, surpassing the 3.8% projection made by economists surveyed by Reuters.

Despite the rise in unemployment, Australia's employment-to-population ratio rebounded to a record high of 64.6%, reflecting a growing number of people employed relative to the working-age population.

Additionally, the participation rate, which measures the proportion of the labour force in relation to the working-age population, reached a new high at 67.2%.

That figure exceeded expectations, as Reuters had anticipated a participation rate of 66.9%.

Reporting by Josh White for Sharecast.com.