Asian markets faced declines on Thursday after reports from the US Federal Reserve revealed that officials saw a US recession by the end of the year, and inflation data did not mitigate expectations of another interest rate hike. While March’s consumer price index increased by a smaller-than-expected amount, a reading of 5.6 percent for core inflation, which excludes food and energy prices, was an acceleration from the previous month. Investors had hoped that the slight rise in prices would indicate that a year of monetary tightening was achieving the desired results, but analysts noted there is still a way to go. Despite another increase in recruitment last week, traders expect the Fed to raise rates for the tenth time in just over a year in May. On Friday, wholesale inflation is expected to be released, alongside first-quarter earnings from major banks such as Citibank and JPMorgan.
Hong Kong was the market most affected by the latest news, with losses in the tech sector as Japan's SoftBank looked to sell the majority of its holdings in Alibaba, leading to over a five percent drop in the ecommerce giant’s shares. JD.com also saw a fall of around four percent. Other markets, including Sydney, Singapore, Wellington, Taipei, Manila, and Jakarta, also experienced losses. However, Tokyo, Shanghai, and Seoul all saw slight gains. Oil prices experienced a minor decrease but remained high, following a two-percent rise on Wednesday. The rally was due to a reduction in US inventories and supply issues in Iraqi Kurdistan, while OPEC is expected to provide an outlook update later in the day.
Key Figures Around 0230 GMT
Tokyo – Nikkei 225: UP 0.9 percent at 28,108.67 (break)
Hong Kong – Hang Seng Index: DOWN 0.8 percent at 20,149.22
Shanghai – Composite: UP 0.1 percent at 3,331.76
Euro/dollar: UP at $1.0999 from $1.0995 on Wednesday
Pound/dollar: UP at $1.2496 from $1.2485
Euro/pound: UP at 88.04 pence at 88.03 pence
Dollar/yen: DOWN at 133.14 yen from 133.19 yen
West Texas Intermediate: DOWN 0.2 percent at $83.13 per barrel
Brent North Sea crude: DOWN 0.2 percent at $87.16 per barrel
New York – Dow: DOWN 0.1 percent at 33,646.50 (close)
London – FTSE 100: UP 0.5 percent at 7,824.84 (close)
