Asian shares decline on Fed aftermath
Tuesday saw a decline in Asian share markets, with investors still digesting the possible effects of the Federal Reserve’s sudden hawkish shift.
Japan’s benchmark index Nikkei stood as the biggest decliner, recording a total of 3.3% drop to slip below 28,000 for the first time in a month. MSCI’s broadest index of Asia-Pacific shares outside Japan traded 1% during its early trade. Chinese blue chips shed 0.4%, while Australia’s benchmark tallied a 1.8% crash.
Economically sensitive sectors, such as banks and energy firms, were hurt by the Fed’s policy meeting on Wednesday. The effect still lingers in the markets after the central bank’s decision to implement rate hikes in 2023 dampened investors’ enthusiasm. More so, St. Louis Fed President James Bullard further fuelled the selloff by highlighting inflation as a natural response to economic growth.