SEOUL, South Korea (AP) — Asian stocks slumped Thursday after the U.S. Federal Reserve raised its key interest rate and said it would pick up the pace of future increases. South Korea’s market benchmark tumbled nearly 2 percent on the first trading day after a meeting of U.S. and North Korean leaders.
KEEPING SCORE: Japan’s Nikkei 225 sank 1 percent to 22,738.61 while South Korea’s Kospi plunged 1.8 percent 2,423.48. Hong Kong’s Hang Seng index dropped 1.1 percent to 30,390.22. China’s Shanghai Composite Index was down 0.1 percent to 3,046.23. Australia’s S&P-ASX 200 slipped 0.1 percent to 6,016.60. Stocks in Taiwan, Singapore and other Southeast Asian markets were also lower.
FED: The Fed’s rate hike was its second this year. The American central bank raised its outlook for increases this year from three to four. Chairman Jerome Powell said the U.S. economy is in great shape but investors worry faster rate hikes could stifle growth.
ANALYST’S TAKE: Expectations for further Fed tightening and U.S.-Chinese trade tensions “provide Asian markets with poor intraday leads,” said Jingyi Pan of IG in a report.
KOREA TALKS: South Korean investors sold stocks after President Donald Trump’s meeting with North Korean leader Kim Jong Un on Tuesday. Trump boasted the meeting ended any nuclear threat from North Korea, and South Korean President Moon Jae-in tried to put a positive spin on the outcome, but the meeting produced no details on how or when North Korea’s nuclear weapons might be eliminated or even reduced. South Korean businesses that have recently gained on expectations for joint inter-Korean business projects were among the biggest losers. Hyundai Elevator, the largest shareholder in the company that had operated inter-Korean tourism projects in the past, nosedived 14.2 percent. Shares of railways vehicle maker Hyundai Rotem plunged 12.6 percent. Its shares had risen since the April inter-Korean summit on expectations for an inter-Korean railway project.
WALL STREET: The Standard & Poor’s 500 index fell 0.4 percent to 2,775.63. The Dow Jones industrial average lost 0.5 percent to 25,201.20. The Nasdaq composite slipped 0.1 percent to 7,695.70. The Russell 2000 index of smaller-company stocks shed 0.3 percent to 1,676.54.points.
CURRENCIES: The dollar slipped to 110.06 yen from 110.33 yen. The euro rose to $1.1815 from $1.1793.
OIL: Benchmark U.S. crude fell 3 cents to $66.61 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose 0.4 percent to $66.64 a barrel in New York on Wednesday. Brent crude, used to price international oils, lost 38 cents to $76.36 per barrel in London. It gained 1.1 percent to $76.74 per barrel on Wednesday.