Investing.com - The Australian Stock Exchange is expected to open lower on Thursday, following Wall Street's decline sparked by the Federal Reserve's recent decisions. ASX 200 Futures were down by 0.4% as of 9:45 am on Thursday, hinting at a potentially weaker opening.
US stocks took a downturn after Federal Reserve officials decided to maintain interest rates at a 22-year high. However, they also indicated their readiness to hike rates once more this year to combat inflation. The decision led to significant losses in big technology companies, as investors anticipated a prolonged period of higher interest rates.
However, some sectors displayed resilience. Real estate and utilities, considered more defensive sectors, reported slight gains. Meanwhile, Treasury yields and the US Dollar Index gained strength following the Fed announcement.
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In commodities, Brent crude oil saw a 0.9% decrease to US$93.53 a barrel, while gold prices remained steady at US$1,930.88. Locally, yields on Australian 2-year and 10-year government bonds rose to 3.96% and 4.21%, respectively. The Australian dollar experienced a slight increase from its previous close.
In Asia, Chinese shares closed lower after the People's Bank of China kept benchmark lending rates at their current levels. Consumer brands and chip makers led declines, while Hong Kong shares also closed lower.
In Europe, stocks ended higher with investors expecting the US Federal Reserve to maintain interest rates. The STOXX 600 saw a 0.9% increase, while Germany's DAX and France's CAC 40 both closed up 0.7%. Lower oil prices and weaker-than-expected UK inflation data also contributed to the positive sentiment. However, the upbeat mood could be dampened if the Fed hints at further rate increases.
The FTSE 100 in the UK also rose by 0.6%, led by property stocks following the release of inflation data. Despite the expectation of a rate hike by the Bank of England, policymakers might refrain from indicating further increases. Oil giants BP PLC (LON:BP) and Shell PLC (LON:SHEL) saw a decline as oil prices turned lower.