Investing.com - Asian markets slid in morning trade on Thursday after the U.S. Federal Reserve raised rates as expected.
China’s Shanghai Composite and the Shenzhen Component fell 0.8% and 0.3% respectively. Hong Kong’s Hang Seng Index declined 1.3%.
The People’s Bank of China said in a statement on Wednesday that it would supply lower-cost liquidity for as long as three years to banks that are willing to lend more to smaller companies.
Meanwhile, Japan’s Nikkei 225 slumped 2.7%, South Korea’s KOSPI fell 0.9% and Australia’s ASX 200 slipped 0.4%.
The fall in Asian stocks came after the U.S. Fed took the target range for its benchmark fund rate to 2.25-2.5% on Wednesday. It reduced its 2019 median forecast for interest rates to 2.9% from a previous estimate of 3.1%, hinting at two rates hikes in 2019. That's below the three rate hikes previously indicated in the Fed's September projections.
However, Fed Chair Jerome Powel noted that policy was not on a preset course. “There’s significant uncertainty about the -- both the path and the ultimate destination of any further rate increases,” Powell told reporters at a press conference after the decision on Wednesday.
Overnight, U.S. stocks stumbled up and down after the decision then ultimately closed sharply lower after Powell’s news conference.
"While this was a dovish hike from the stance that the Fed was in before, this is somewhat not as dovish as many participants probably wanted," said Charlie Ripley, senior investment strategist for Allianz (DE:ALVG) Investment Management. "It would have been a difficult move for the Fed to completely remove some of the 2019 hike expectations, but I think they're making the message clear that they're going to remain more data dependent as we go into 2019."
In other news, Noble Group completed its $3.5 billion restructuring on Thursday. The company now emerged as a smaller, unlisted firm after its accounting practices were being questioned by Iceberg Research in 2015.