This is CNBC’s live blog covering the Asia Pacific markets.
Asian markets rose sharply as investors took comfort in the US Federal Reserve’s decision to leave benchmark interest rates unchanged, while analyzing inflation and trade data from across the region.
The Federal Reserve on Wednesday held interest rates steady again amid signs of economic growth, while labor market conditions and inflation remained above the central bank’s target. The decision also included raising the level of the Federal Reserve’s overall assessment of the economy.
Data from South Korea showed that consumer prices accelerated for the third straight month in October, with the CPI rising 3.8% year-on-year. Economists polled by Reuters had expected an increase of 3.6%.
Australia’s goods trade surplus fell in September to its lowest level in 32 months, according to official data.
Japan’s Nikkei 225 index rose 1.15%. The Topix index added 0.76%, reaching its highest levels in three weeks.
South Korea’s KOSPI rose 1.99%, while the KOSDAC rose 3.65%.
Hong Kong’s Hang Seng rose 1.43% at the open, while China’s CSI 300 opened 0.4% higher.
In Australia, the S&P/ASX 200 rose 1.20%, approaching its highest level in almost two weeks.
US markets rebounded from the dismal past three months on Wednesday, after the Federal Reserve kept interest rates unchanged for the second time in a row – leading investors to believe the central bank will remain in place for the rest of the year.
The Dow Jones Industrial Average rose 0.67%. The S&P 500 rose 1.05%, briefly surpassing its 200-day moving average. The Nasdaq Composite Index rose 1.64%.
— CNBC’s Sarah Min and Pia Singh contributed to this report
DBS leads losses in Singapore after MAS imposed a six-month moratorium on new investments
DBS Bank shares fell 0.36% in early trading, in contrast to the Straits Times Index in Singapore’s gain of 0.62%.
This comes after the Monetary Authority of Singapore imposed a six-month moratorium on new investments by the bank, among other measures, following a widespread outage in digital and physical banking services on October 15.
Earlier this year, DBS Bank suffered two outages in March and May, prompting the Monetary Authority of Singapore to describe the outages as “unacceptable” and impose additional capital requirements on the bank.
—Lim Hui Ji
Retail sales in Hong Kong recorded the slowest growth since the beginning of the year
Retail sales in Hong Kong grew at their slowest pace since January, highlighting the impact of the global high interest rate environment.
September retail sales rose 13% year-on-year, lower than the previous month’s 13.7% rise, official data showed late Wednesday.
“The reason behind the slow recovery is high interest rates, which have discouraged consumption, tourism, foreign trade and investment,” said Samuel Tse, an economist at DBS. “Hong Kong’s economic fundamentals closely track mainland (China).”
External demand from both China and the rest of the world has been tepid, Tse says, highlighting that rising interest rates have restricted consumption through a high fixed deposit rate, a strong Hong Kong dollar, and a weak asset market.
– Shreyashi Sanyal
CNBC Pro: Tencent, Alibaba and more: Jefferies says buybacks are gaining steam in Asia, names stocks to watch
Analysts at investment firm Jefferies said Asian stocks were preparing for large or ongoing buybacks, which they said was an opportunity for investors.
Companies buy back shares from investors for several reasons such as having a strong balance sheet and making valuations more attractive. Buybacks also provide “a sustainable source of demand for stocks while enhancing confidence regarding companies’ faith in their own shares,” Jefferies analysts wrote in an Oct. 25 research note.
Many Chinese technology giants such as Tencent and Alibaba appeared on the list.
CNBC Pro subscribers can read more here.
– Amala Balakrishner
CNBC Pro: Will the S&P 500 rise by the end of the year? Solomon from Morgan Stanley steps in and chooses to buy stocks of major technology companies
Will the S&P 500 approach 5,000 by the end of the year?
Andrew Slimmon, of Morgan Stanley Investment Management, was among some on Wall Street who thought so earlier this year.
CNBC Pro subscribers can read more here about what he’s thinking now.
Slimon said that if the market rises at the end of the year, the “Great Seven” stocks will lead it, identifying his favorite game.
South Korea reported a higher-than-expected inflation rate, accelerating for the third month in a row
South Korea’s inflation rate accelerated for the third straight month in October, with the consumer price index rising 3.8% year-on-year.
This was higher than the 3.6% forecast of economists polled by Reuters, and also more than the 3.7% increase in September.
The reading marks the third consecutive month that the country’s inflation rate has risen, after reaching a 25-month low of 2.3% in July.
– Lim Hui Ji
The Federal Reserve keeps interest rates unchanged
The Federal Reserve kept interest rates unchanged at a range of 5.25% to 5.5%. The central bank also updated its outlook on the economy.
The Federal Reserve said in a statement that “economic activity expanded at a strong pace in the third quarter.” In previous statements, the central bank indicated that the economy is growing at a “strong pace.” The Fed also said Wednesday that job gains have “moderated since earlier in the year but remain strong.”
“Tight” financial conditions may prevent riskier assets from rising, says Jenna Bulfin
According to Gina Bulfin, the Fed’s assessment of the economy may influence more volatile assets in the near term.
“The Fed’s acknowledgment that financial conditions have tightened may prevent riskier assets from rising in the short term,” said Bulvin, president of Boston-based Bulvin Wealth Management Group. “So far, there has been no change in the federal funds rate, leaving fixed income and the stock market unchanged. The Fed is likely finished.”
After the Federal Reserve kept interest rates at current levels, Chairman Jerome Powell said that taming inflation will likely require a slowdown in growth and in the labor market. “Tightening financial and credit conditions for households and businesses will likely impact economic activity, employment, and inflation,” the FOMC statement on Wednesday said.
Stocks were definitely higher Wednesday afternoon, with the IT and communications sectors leading the market higher by 1.8% and 1.6%, respectively.
– Piya Singh
The odds of a December Fed rate hike are falling, based on futures tracked by CME FedWatch
The chances of the Federal Reserve raising interest rates by another quarter point at its next meeting on December 13 diminished on Wednesday after the central bank’s November meeting.
The implied probability of a December hike fell to 17.1%, down from 28.8% on Tuesday and 29.3% a week ago, according to the CME FedWatch tool, which is based on 30-day federal funds futures prices.
The federal funds rate is currently between 5.25% and 5.50%, as it was set by the Federal Reserve in July.
#Asian #markets #Federal #Reserves #decision #hold #interest #rates