Hong Kong stocks fall 3%, leads losses in Asia-Pacific after Fed signals more hikes ahead

Abigail Ng

Shares in the Asia-Pacific dropped on Thursday after the U.S. Federal Reserve Chairman Jerome Powell signaled further hikes ahead after raising rates by 75 basis points as expected and called discussions on pausing the tightening cycle “premature.”

Hong Kong’s Hang Seng index fell 3.29%, leading losses in the wider Asia-Pacific trading session. Hang Seng Tech fell 4.14%. Mainland China’s Shanghai Composite lost 0.11% and the Shenzhen Component

was down 0.45%.

In Australia, the S&P/ASX 200 was last down 1.86%. The Kospi fell 0.94% and the Japanese market was closed for a holiday Thursday. The MSCI’s broadest index of Asia-Pacific shares outside Japan slipped 2%.

TICKER	COMPANY	NAME	PRICE	CHANGE	%CHANGE
.N225	Nikkei 225 Index	*NIKKEI	27663.39	-15.53	-0.06
.HSI	Hang Seng Index	*HSI	15309.48	-517.69	-3.27
.AXJO	S&P/ASX 200	*ASX 200	6859.5	-127.2	-1.82
.SSEC	Shanghai	*SHANGHAI	2984.43	-18.94	-0.63
.KS11	KOSPI Index	*KOSPI	2319.75	-17.12	-0.73
.FTFCNBCA	CNBC 100 ASIA IDX	*CNBC 100	6830.78	-133.33	-1.91

Overnight on Wall Street, the Dow Jones Industrial Average dropped 505.44 points, or 1.55% to 32,147.76, and the S&P 500 shed 2.5% to 3,759.69. The Nasdaq Composite tumbled 3.36% to 10,524.80.

The indexes rose earlier in the session on a line in the Fed statement that said “the Committee will take into account the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and financial developments.”

— CNBC’s Patti Domm and Jeff Cox contributed to this report.

JPMorgan Asset Management sees a smaller Fed hike in December

JPMorgan Asset Management expects the Federal Reserve to hike rates by a smaller 50 basis points in December, according to a note.

APAC Chief Market Strategist Tai Hui said the Fed could take a more moderate path in the near future.

“If core inflation does ease between now and the end of the year, the Fed could opt for a more moderate rate path and avoid putting the economy into a recession,” he said in the note.

“We do think that there are some easing in inflation on the horizon,” he said, adding that the Fed’s tightening cycle is expected to extend into the second quarter of 2023.

–Jihye Lee

Private survey shows China’s services activity slowed to six-month low

China’s Caixin Services Purchasing Managers’ Index came in at 48.4 for October, the the lowest reading since May and the second consecutive contraction for the sector.

In September, the print was 49.3, also below the 50 point mark, indicating a contraction.

Earlier this week, the official non-manufacturing PMI came in at 48.7.

PMI readings are sequential and represent month-on-month expansion or contraction.

— Abigail Ng

South Korea stock movers: Heavyweights drop, defense stocks rise

Market bellwether Samsung Electronics saw sharp losses in the overall negative session, down 2.42% in the early hours of trade.

Hyundai Motor lost 2.42% and SK Hynix dropped 2.49%, while Naver lost 3.45%.

Bucking the trend, defense stocks, gained after North Korea fired more missiles into the waters between Korea and Japan.

Victek jumped 3.44%, while Korea Aerospace added 1.24%. Hanwha Aerospace was 0.71% higher.

The Kospi was down around 1%.

— Abigail Ng

CNBC Pro: Wall Street slashes price targets this earnings season. Here are 13 U.S. stocks that bucked the trend

Only a handful of companies have avoided a cut on their share price target by Wall Street banks this earnings season, a CNBC Pro analysis has revealed.

Of the nearly 300 companies in the S&P 500 that reported results in the past month, more than two-thirds – 72% – have seen their median price targets slashed or left unchanged by analysts compared to a month ago.

Only 13 stocks have emerged with a meaningfully higher price target of 5% or more and still offered a potential upside of at least 5%.

— Ganesh Rao

Australia stock movers: BHP, Wesfarmers down 3%

Index heavyweights on the S&P/ASX 200 dropped sharply, with BHP and Wesfarmers dropping 3% each. Shares were in the red across the board, with miners such as Newcrest Mining tumbling 4.14% and Bluescope Steel falling more than 5%.

— Abigail Ng

Dow sinks 505.44 points, Nasdaq dives 3.36%

Stocks closed lower in a volatile trading session as the Federal Reserve delivered another 75 basis point rate hike and hinted at its intentions to continue hiking.

The Dow Jones Industrial Average slid 505.44 points, or 1.55%, to settle at 32,147.76. The S&P 500 dropped 2.5% to close at 3,759.69, while the Nasdaq Composite tumbled 3.36% to finish at 10,524.80.

— Samantha Subin

Stocks fall as Powell says terminal interest rate will be higher than previously expected

In a briefing with reporters on Wednesday following a fourth consecutive 0.75 percentage point rate hike, Federal Reserve Chairman Jerome Powell said the central bank’s ultimate target for increases in interest rates has gone up.

“We still have some ways to go and incoming data since our last meeting suggests that the ultimate level of interest rates will be higher than previously expected,” he said.

Stocks slipped following the comment, which signals that interest rates will continue to march higher and likely stay at a higher level than expected for longer as the Fed tames inflation. That reversed gains from earlier in the afternoon when traders digested the Fed statement as more dovish and hoped that rate hikes would be smaller in the future.

The Dow Jones Industrial Average was up about 60 points but pared gains. The S&P 500 also slumped from a post-rate hike spike and was up only 0.09%. The Nasdaq was slightly in the red.

—Carmen Reinicke

Source : CNBC