Asian stocks mostly down after Fed meeting
SEOUL, South Korea (AP) — Asian stock markets mostly fell Thursday after the U.S. Federal Reserve increased its estimate for the level of the central bank's benchmark interest rate by the end of 2015, surprising investors who expected a slower pace of rate hikes.
KEEPING SCORE: Hong Kong's Hang Seng was down 0.7 percent to 24,199.87 and South Korea's Kospi dropped 0.8 percent to 2,046.53. Australia's S&P/ASX 200 declined 0.1 percent to 5,399.60. Stocks in New Zealand and mainland China also fell but Japan's Nikkei 225 rose 1.3 percent to 16,099.30 as the yen weakened.
FED WATCH: The Fed statement kept its "considerable" wording in reference to how much time would elapse before it starts raising interest rates but raised its estimate of what the Fed's benchmark interest rate should be at the end of 2015: to 1.38 percent from 1.13 percent decided at its June meeting. The Fed has kept its benchmark rate at a record-low level near zero since the 2008 financial crisis to support economic recovery; the super-easy monetary policy has also boosted stock markets. Most economists expect the first rate increase to happen by the middle of next year. Before the Fed's meeting, there was speculation the Fed might signal an earlier start to rate hikes.
THE QUOTE: "The 2015 median rate forecast suggests that the Fed will have to hike by June at the latest, with a hike in every meeting thereafter," Mizuho Bank said in a daily commentary. "This was a marked surprise to markets, which was looking to a slower pace of hikes."
SONY, SAMSUNG WOES: Asian tech giants were among the biggest losers of the day. Sony Corp. dived 10 percent after forecasting its annual loss would swell to $2.15 billion, citing a writedown of its mobile business amid intense competition from Chinese rivals. The once iconic Japanese company cancelled dividends for the first time in more than five decades. Samsung Electronics Co. fell as much as 2 percent in Seoul even though it pushed forward the launch schedule for the Galaxy Note 4 smartphone in its home market.
HYUNDAI PLUNGE: Shares of Hyundai Motor Co., South Korea's top automaker, and its affiliate Kia Motors Corp. plunged about 9 percent each after a Hyundai Motor-led consortium outbid Samsung Electronics Co. for real estate in Seoul's Gangnam district. Seller Korea Electric Power Corp. said Hyundai Motor-led consortium offered 10 trillion won ($9.6 billion) for 800,000 square meters of land in the high-end district.
WALL STREET: Wall Street finished higher Wednesday as the Fed statement relieved investors who had fretted about the timing of first rate hike. The Dow gained 0.2 percent to a record high of 17,156.85 and the S&P 500 edged up 0.1 percent to 2,001.57, falling short of its own closing high of 2,007.71 from Sept. 5. The Nasdaq composite finished higher by 0.2 percent to 4,562.19, still well below its dot-com era peak.
ENERGY: Benchmark U.S. crude was down 65 cents to $93.77 a barrel in electronic trading on the New York Mercantile Exchange. The contract dropped 46 cents to settle at $94.42 on Wednesday. The price of oil fell after the Energy Department reported a 3.7 million barrel increase in U.S. crude inventories last week. Most analysts had expected a decline, which is typical for this time of year.
CURRENCIES: The euro rose to $1.2861 from $1.2840 late Wednesday. The dollar rose to 108.74 yen from 108.63 yen.