Asian Stocks Gain after a Dovish Fed

Asian equity markets rose higher today by the afternoon trade session after the Federal Open Markets Committee (FOMC) announced, overnight, that they would leave rates as is. The FOMC, the monetary policy arm of the Federal Reserve Board, also took a very dovish pivot with their monetary policy tone ruling out any rate hikes this year and maybe one rate hike in 2020.

The Asian benchmark, in Japan, the Nikkei 225 and all other financial markets were closed today for a public holiday.

The MSCI Asia index, which does not include Japan, by 12:30 pm Hong Kong time, was up 0.44 percent to trade at 531.47.

In South Korea, the Kospi composite index tacked on 0.3 percent. Shares of chipmaker SK Hynix rose more than six percent.

In Australia, the benchmark S&P ASX 200 fell lower after data showed that the country’s labor market is near an eight year low. The ASX 200 lost 0.03 percent as the financial sub-index shed 0.3 percent. The island nation’s Big 4 banks all fell lower.

In China, the Shanghai composite was up 0.72 percent. The smaller Shenzhen composite gained 0.9 percent and the Shenzhen component was up 0.75 percent.

Asian Traders Digest the FOMC Policy shift and Support Stocks

This was a major pivot with monetary policy for the Fed. The FOMC took a very dovish monetary policy stance that ruled out any rate hikes in 2019 with one rate hike maybe coming in 2020. They also slashed their economic growth and inflation forecasts.

The Fed feels they need to guard against inflation with a more restrictive approach to monetary policy as the move forward.