US interest rate hike causes indecisive reactions on Asian stock markets

The Fed in the USA raised the key interest rate by 0.25 percentage points due to rising inflation. Asian investors react quickly, but in different ways.

Sydney. The first interest rate increase by the US Federal Reserve (Fed) in more than three years is causing indecisive reactions on the stock markets in Asia.

The leading index Nikkei in Tokyo advanced by 0.3 percent to 64,136 points.

The broader Topix gains almost one percent to 4094 points.

The Shanghai stock exchange lost around half a percent.

The index of the most important companies in Shanghai and Shenzhen fell by about half a percent.

The leading Kospi index in South Korea hardly changed and closed at 6,715 points.

As expected, the Federal Reserve raised interest rates by a quarter of a percentage point on Wednesday and at the same time signaled a further increase this year. According to experts, this eased Japanese investors' concerns about the independence of the US Federal Reserve given that President Donald Trump had repeatedly called for interest rate cuts.

However, Wataru Akiyama, strategist at financial services provider Nomura, was cautious. “Although there are price gains across the board, the situation on the Japanese stock market cannot currently be described as particularly strong.” Interest rate-sensitive technology stocks in particular were trending weaker ahead of the Japanese central bank's decision on Friday.

The market is also pricing in a possible slowdown in the development of artificial intelligence. In Hong Kong, too, the market needs fiscal stimulus or an unexpected technological breakthrough for a sustainable and noticeable recovery, said chief strategist Kevin Liu of China International Capital Corporation.