Asian markets open higher as Fed signals no rate hikes in 2020

Asian markets mostly edged higher in Thursday afternoon trade after the U.S. Federal Reserve signaled overnight that it would not raise interest rates in 2020.

The Nikkei 225 in Japan gained 0.3 percent in afternoon trade while the Topix index was fractionally higher. South Korea’s Kospi added 1.57 percent, as shares of industry heavyweight Samsung Electronics and SK Hynix surged more than 2 percent each.

Hong Kong’s Hang Seng index jumped 1.26 percent as shares of Chinese tech juggernaut Tencent surged 2.12 percent. Life insurer AIA also saw its stock gain 2.31 percent.

Shares in mainland China, however, were mixed by the afternoon. The Shanghai composite was down 0.14 percent while the Shenzhen component added 0.2%. The Shenzhen composite was also 0.183 percent higher.

Meanwhile, shares in Australia declined, with the S&P/ASX 200 slipping 0.64 percent.

Overall, the MSCI Asia ex-Japan index was 1 percent higher.

Investors watched for market reaction to comments from the Fed. The U.S. central bank left interest rates unchanged on Wednesday, a decision that was largely anticipated — capping a year where the Fed cut its benchmark rate three times. The central bank also indicated it does not expect any policy changes through at least 2020.

Stocks stateside closed fractionally higher overnight following the Fed’s decision on interest rates. The Dow Jones Industrial Average rose 29.58 points to 27,911.30. The S&P 500 added 0.3 percent to 3,141.63 while the Nasdaq Composite gained 0.4 percent to 8,654.05.

Meanwhile, developments on U.S.-China trade will continue to be monitored ahead of Sunday, when additional tariffs on Chinese exports to the U.S. are set to kick in.

“It seems like the baseline is for an extension but not a deal, and certainly not a tariff rollback,” Alex Wolf, head of Asia investment strategy at J.P. Morgan Private Bank, told CNBC’s “Squawk Box” on Thursday.

“It seems like the market is taking a fairly benign view of that deadline, of course there are worries but my guess would be that … there’s more of an assumption that those will be extended, that those will not be put in place than there are that they will be,” Wolf said.

Currencies and oil

The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 97.044 after touching highs above 97.5 yesterday.

The Japanese yen traded at 108.55 against the dollar after touching an earlier high of 108.44. The Australian dollar was at $0.6884 after rising from levels below $0.681 in the previous session.

Oil prices rose in the afternoon of Asian trading hours. The international benchmark Brent crude futures contract added 0.41 percent to $63.98 per barrel while U.S. crude futures gained 0.2 percent to $58.88 per barrel.

Source: CNBC