Asian Shares Mixed As Fed Doubles Taper

Asian stocks ended Thursday’s session on a mixed note after the Federal Reserve said it would accelerate its pullback of economic stimulus and was likely to raise interest rates three times next year to tackle elevated inflation.

Chinese markets ended higher, with industrial, financial and energy stocks leading the surge. The benchmark Shanghai Composite Index climbed 27.39 points, or 0.8 percent, to 3,675.02, while Hong Kong’s Hang Seng Index ended up 54.74 points, or 0.2 percent, at 23,475.50 despite concerns about more U.S. sanctions on Chinese companies.

Japanese stocks rose the most in nearly seven weeks as the FOMC decision on winding down pandemic-era bond purchases and lifting interest rates three times next year came in line with market expectations.

The Nikkei 225 Index spiked 606.60 points, or 2.1 percent, to 29,066.32, while the broader Topix ended 1.5 percent higher at 2,013.08.

Tech shares surged, with Tokyo Electron, Screen Holdings and Advantest rallying 3-5 percent. Uniqlo operator Fast Retailing rose 3 percent.

In economic news, Japanese manufacturing activity expanded for an 11th straight month in December but at a slightly slower pace than the previous month, a survey revealed. Another report showed the country posted a trade deficit for the fourth month in a row.

Meanwhile, Australian markets ended in the red as unemployment blew past expectations in November, raising pressure on the Reserve Bank to end its asset purchases altogether in February.

Separately, the manufacturing sector in Australia expanded at a slower pace in December, the latest survey from Markit Economics showed.

The benchmark S&P/ASX 200 Index dipped 31.40 points, or 0.4 percent, to 7,295.70, extending losses into a third straight session. The broader All Ordinaries Index ended down 17.70 points, or 0.2 percent, at 7,618.50.

Biotech giant CSL plunged 8.2 percent after an announcement that it has completed a $6.3 billion equity raising from institutional investors to fund the $11.7 billion acquisition of Swiss drug maker Vifor Pharma. Energy stocks fell broadly, with Beach Energy losing nearly 2 percent.

Seoul stocks rose for a second straight session as a signal by the Federal Reserve that it would raise interest rates in 2022 reduced a source of uncertainty for markets. The Kospi climbed 17.02 points, or 0.6 percent, to 3,006.41.

Pharmaceutical giant Samsung Biologics jumped 6 percent as the country’s new Covid-19 cases hit a fresh high of 7,622.

New Zealand shares fell, with the benchmark NZX-50 Index ending down 91.87 points, or 0.7 percent, at 12,777.54 after data showed the country’s GDP shrank 3.7 percent in the third quarter from the previous quarter.

Sky Network Television jumped 3.8 percent after reaching a deal to sell its Auckland campus at Mt Wellington to Goodman Property Trust for $56 million.

U.S. stocks rallied overnight after the Fed announced its widely expected decision to trim its bond purchases by $30 billion per month.

While the central bank’s latest projections forecast as many three rate hikes in 2022, Fed Chair Jerome Powell stressed that the Fed’s policies are flexible and adaptable to any change in its economic outlook.

In particular, he warned that any resurgence in Covid-19 could slowdown the need for a rate hike.

The tech-heavy Nasdaq Composite soared 2.2 percent, the Dow climbed 1.1 percent and the S&P 500 surged 1.6 percent.

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