Australia stocks trade cautiously; Fed keeps rates unchanged

Stocks in Australia were cautious in the morning after the U.S. Federal Reserve left interest rates unchanged at its latest policy meeting.

The ASX 200 was largely flat in early trade, with the major sectors in mixed territory. Energy stocks fell by 0.77 percent while the heavily-weighted financial subindex gained 0.38 percent.

Meanwhile, futures pointed to a cautious open for the Nikkei 225 in Japan. The Nikkei futures contract in Chicago was at 22,480 while its counterpart in Osaka was at 22,430. The index last closed at 22,486.92.

The mainland China markets, which are due to open at 9:30 a.m., will be closely watched as trade tensions between Washington and Beijing continue to weigh on investor sentiments.

One economist warned that relations between the U.S. and China could get more frosty now that the midterm elections stateside are over.

“The upshot is that there will be more noise and volatility on China,” TS Lombard’s Chief U.S. Economist, Steve Blitz, said in a note on Thursday, commenting on the post-election environment. Democrats, including Senator Chuck Schumer, are “China hawks,” Blitz said.

More economic data will be out at 9:30 a.m. HK/SIN, when markets open in China, with the release of the country’s Consumer Price Index and Producer Price Index for the month of October.

Symbol
Name
Price

 

Change
%Change

NIKKEI

HSI

ASX 200

SHANGHAI

KOSPI

CNBC 100

Fed leaves rates unchanged

Overnight on Wall Street, the S&P 500 slipped 0.25 percent to close at 2,806.83 while the Nasdaq Composite also saw declines of 0.5 percent to 7,530.88 by the closing bell. The Dow Jones Industrial Average, on the other hand, climbed 10.92 points to close at 26,192.22 — posting a four-session winning streak.

The moves came after the Fed kept interest rates unchanged, as was widely expected. However, the central bank said in a statement it expects “further gradual increases” in the overnight rate. The Fed also did not mention the volatility that has hit the market recently.

The Fed has hiked rates three times this year and is forecast to raise one more time before year-end.

Currencies

The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 96.655 after seeing lows around the 96 handle yesterday.

The Japanese yen was at 114.02 against the dollar after weakening from levels above 113.6 in the previous session. The Australian dollar traded at $0.7262 after seeing highs above $0.729 yesterday.

— CNBC’s Fred Imbert contributed to this report.


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