Home >Markets >Stock Markets >Markets seen volatile; Asian peers mixed after US Fed rate cut
Bank stocks, which tend to outperform when interest rates are higher, dropped 3.4%, while the broader financials sector fell 2.6% (Photo: AP)
Bank stocks, which tend to outperform when interest rates are higher, dropped 3.4%, while the broader financials sector fell 2.6% (Photo: AP)

Markets seen volatile; Asian peers mixed after US Fed rate cut

  • Asian stocks were mixed, with Japan and Hong Kong flat, Korea up, and China and Australia down
  • Futures on the S&P 500 were up about 0.8% after the index had tumbled almost 3%

Indian stock markets are likely to be volatile on Wednesday tracking mixed cues from Asian peers in early deals.

Futures on the S&P 500 were up about 0.8% after the index had tumbled almost 3% in wake of an emergency 50 basis-point rate cut by US Federal Reserve that failed to ease concerns about an economic downturn. It was the central bank’s first such action coming amid scheduled meetings since the 2008 financial crisis.

Following the Fed move, the Hong Kong Monetary Authority announced a 50 basis points rate cut to 1.5%.

Asian stocks were mixed, with Japan and Hong Kong flat, Korea up, and China and Australia down. Ten-year Treasury yields stayed below 1% after falling below that level for the first time Tuesday.

US equities earlier had tumbled after Fed Chairman Jerome Powell warned that the virus outbreak will weigh on activity “for some time." Expectations the Fed may act again as soon as this month show markets remain extremely cautious about the economy’s prospects to weather the hit.

Back home, a bankruptcy court on Tuesday approved a resolution plan submitted by state-run NBCC (India) Ltd to acquire Jaypee Infratech Ltd, offering relief to thousands of homebuyers in the property developer’s stalled projects in Noida and Greater Noida.

The Union government is exploring the possibility of airlifting automotive parts from China to ease a shortage caused by the closure of factories there due to the Covid-19 epidemic, said three people directly aware of the development.

The Reserve Bank of India (RBI) on Tuesday said it is monitoring global and domestic developments around COVID-19, commonly referred to as the novel coronavirus, closely and continuously and is ready to take appropriate actions to ensure orderly functioning of financial markets, stability, and confidence.

Elsewhere, oil steadied after climbing in the wake of OPEC+ committee recommendation for a larger supply cut to offset lost demand from the spread of the virus.

The yen fell 0.2% to 107.37 per dollar after surging on Tuesday.The offshore yuan rose 0.1% 6.9429 per dollar.

The euro bought $1.1165.

Gold was little changed at $1,642 an ounce.

(Bloomberg contributed to the story)

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