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23.03.2023 11:38 PM
Asian stocks mostly negative

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On Wednesday, the US central bank held a two-day meeting and this had an impact on all world stock indices. Major Asian stock markets fell for the most part. The Chinese Shanghai Composite and Korean KOSPI lost 0.02% and 0.08%, respectively. Japan's Nikkei 225 and Australia's S&P/ASX 200 were slightly down by 0.5% and 0.67% respectively. At the same time, the Shenzhen Composite showed weak growth (by 0.09%), while Hong Kong's Hang Seng Index added a little more at 0.68%.

Traders around the world were focused on the US central bank meeting. The Federal Reserve decided to increase the interest rate by 0.25%, to 4.75-5%. In addition, the Fed has reduced the forecast for US economic growth for this year, and on the contrary, it has increased expectations of consumer price growth.

According to the Fed's statement, despite some recent shocks in the banking sector, the system remains stable. Although there may be some pressure on business activity in general.

It also follows from Fed Chairman Jerome Powell's statement that we should not expect interest rate cuts this year, but by the end of next year we can expect it to fall. Analysts' opinions on the next interest rate hikes are divided: some expect another increase of 0.25%, while others believe that the rate will remain unchanged.

As a result of the Fed meeting, the main US indicators fell by 1.6%, which immediately had an effect on all other world stock markets.

Over the past two weeks, stock markets around the world have been experiencing instability. Against the background of the bankruptcies of two banks in the United States and an emergency sale of one of the largest Swiss banks, the value of securities of other banks around the world began to decline. Despite the attempts of central banks to prevent the "contagion" of other institutions and the emergence of concerns among investors about a possible crisis in the banking system, they did not quite succeed.

Amid everything that is happening in China, shares of the largest companies in the tech sector traded higher. Tencent Holdings, Ltd. gained more than 6% due to the fact that the company registered a higher profit for the year than previously expected.

During the year, numerous inspections and investigations were carried out at the company, several fines were imposed on it, which aggravated the situation of Tencent. Now the company plans to concentrate on its core business and reduce costs.

A positive effect on the growth of shares of Chinese companies is the easing of anti-Covid measures in the country. The government also declares the state's intention to stimulate the economic growth of the People's Republic of China after three years of rather harsh restrictive measures. In particular, it is expected to ease the regulation of the technology sector.

In addition to the increase in Tencent quotes, the value of Alibaba securities also increased, rising by 3.2%, JD.com , which added 1.8%, as well as Baidu, which increased by 0.7%.

Tech shares are recovering after quite serious losses over the past year, during which an increase in profitability and interest rates made these securities less attractive.

Anastasia Kravtsova,
Analytical expert of InstaForex
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