ASIAN shares were mostly higher on Thursday, Sept. 23, 2021 after the Federal Reserve signaled it may begin easing its extraordinary support measures for the economy later this year.
Shares rose in Hong Kong, Shanghai, Australia and Taiwan but fell in South Korea and Malaysia. US futures were higher. Markets were closed in Tokyo for a holiday.
The US central bank indicated it may start raising its benchmark interest rate sometime next year, earlier than it envisioned three months ago. It also said it will likely begin slowing the pace of its monthly bond purchases “soon” if the economy keeps improving. The Fed’s been buying the bonds throughout the pandemic to help keep long-term interest rates low.
Markets also were reassured after Evergrande, one of China’s biggest private real estate developers, said it will make a payment due Thursday. That likely eased some concerns about heavily indebted Chinese real estate developers and potential ripple effects of possible defaults.
By early afternoon, Evergrande Group’s Hong Kong-traded shares were up 18 percent. They have lost about 80 percent of their value since the beginning of the year.
In Hong Kong, the Hang Seng index gained 0.7 percent to 24,380.59. The Shanghai Composite index added 0.5 percent to 3,645.05. Australia’s S&P/ASX 200 surged one percent to 7,372.80. South Korea’s Kospi dropped 0.4 percent to 3,075.15.
“Asian equity markets are having a good day as perceptions of reducing Evergrande risks lifts sentiment,” Jeffrey Halley of Oanda said in a commentary.
Fed’s plan
At a news conference, Federal Reserve Chair Jerome Powell said Wednesday, Sept. 22, that the Fed plans to announce as early as November that it will start to taper its monthly bond purchases, should the job market maintain its steady improvement.
The S&P 500 rose one percent to 4,395.64, breaking a four-day losing streak. The benchmark index initially climbed 1.4 percent after the Fed issued its statement. (AP)