Asia report: Markets fall ahead of latest Fed decision

Stock markets in the Asia-Pacific region closed lower on Wednesday, as investors adopted a cautious stance ahead of the Federal Reserve's policy decision later in the global day.

Most market participants were expecting another rate hike from the US central bank, picking a 25-basis point rise to the central bank's rate target.

“Banking sector concerns once again dominated the headlines on Wall Street as regional banks took the brunt of the selling, as the regional bank exchange-traded fund closed out the day down over six percent,” said TickMill Group market analyst Patrick Munnelly.

“Asian equity investors took their lead from Wall Street's negativity as they mostly traded in the red this morning.

“This comes ahead of a widely expected interest rate increase from the FOMC this evening.”

Open bourses fall on quieter day for region

Markets in Japan were closed for the Constitutional Memorial Day holiday, while traders in mainland China enjoyed the third and final day of the Labour Day break.

The Hang Seng Index in Hong Kong fell 1.18% to 19,699.16, with Sands China, ENN Energy, and PetroChina losing 4.94%, 4.45%, and 4.44% respectively.

South Korea’s Kospi slipped 0.91% to 2,501.40, with shares of Amore Group down 8.29%, Hanmi Science losing 6.79%, and Amorepacific closing 6.4% weaker.

Elsewhere, the S&P/ASX 200 index in Australia closed down 0.96% at 7,197.40, with top losers including Amcor, which slid 9.53%, while ARB Corporation lost 5.69% and Ramsay Health Care tumbled 4.83%.

Finally, New Zealand’s S&P/NZX 50 lost 1.08% to close at 11,907.99, with Westpac Banking Corporation down 4.14%, Fletcher Building falling 3.37%, and A2 Milk declining 3.21%.

In currency markets, the yen was last 0.68% stronger on the dollar to trade at JPY 135.62, while the Aussie weakened 0.05% to AUD 1.5016.

The Kiwi, meanwhile, advanced 0.25% against the greenback to change hands at NZD 1.6068.

On the energy front, Brent crude futures were last down 1.93% on ICE at $73.87 per barrel, while the NYMEX quote for West Texas Intermediate fell 2.02% to $70.21.

Retail sales rise in Australia, NZ unemployment remains stable

In economic news, preliminary retail sales rose 0.4% month-on-month in Australia in March, according to official data, which was slightly higher than February's increase of 0.2%.

Discretionary retail was under pressure, however, with household goods falling 0.4%, while clothing, footwear, and personal accessories dropped 1%, and department store sales contracted 0.2% month-on-month.

The headline retail sales growth was said to have been driven by food retailing, amid high food inflation in the sunburnt country.

The Reserve Bank of Australia’s Tuesday rate hike, meanwhile, was described by governor Philip Lowe as being due to “uncomfortably persistent” services inflation.

Lowe said in an overnight speech that the inflation peak in Australia had passed, but claimed it would be some time before inflation came back to the central bank’s target range of between 2% and 3%.

While the RBA head agreed inflation for goods is slowing, Lowe said price rises for services and energy looked set to remain high.

He was also concerned over "worryingly persistent" services inflation in other economies, leading to a potential upside risk.

Finally on data, New Zealand's unemployment rate for the first quarter held steady at 3.4%, unchanged from the final quarter of 2022 and slightly lower than economist expectations for 3.5%.

However, the unemployment rate rose by 0.2 percentage points year-on-year, from 3.2% a year ago.

The country's labour force participation rate was 72%, up 0.2 percentage points from the prior quarter and one percentage point higher than the 71% recorded a year earlier.

Reporting by Josh White for Sharecast.com.

HANG SENG INDEX -234.65 (-1.18%) 19,699.16

RISERS
Budweiser +2.87% HKD 23.30
China Mengniu Dairy +2.41% HKD 31.85
Haier Smart Home Co +2.18% HKD 25.80
Lenovo Group +1.1% HKD 8.27
Zhongsheng +0.45% HKD 33.35

FALLERS
Sands China -4.94% HKD 26.950
ENN Energy -4.45% HKD 107.30
PetroChina H -4.44% HKD 5.17
Alibaba Health Information Technology -4.15% HKD 5.31
CNOOC -3.32% HKD 12.22

KOSPI -0.22 (-0.91%) 1,501.40

RISERS
KakaoBank +6.87% KRW 24,100
SK IE Technology Co +6.1% KRW 83,500
HYBE +3.51% KRW 294,500
KakaoPay +2.34% KRW 56,900
Ssangyong Cement Industrial Co +2.21% KRW 6,010

FALLERS
Amore Group -8.29% KRW 33,200
Hanmi Science -6.79% KRW 40,500
Amorepacific -6.4% KRW 115,500
LG Household & Healthcare -5.18% KRW 586,000
LG Energy Solutions -4.06% KRW 567,000

S&P/ASX 200 -70.00 (-0.96%) 7,197.40

RISERS
Gold Road Resources +4.68% AUD 1.90
Evolution Mining +3.74% AUD 3.61
Infratil +3.28% AUD 8.81
Bellevue Gold +3.01% AUD 1.37
Regis Resources +2.89% AUD 2.14

FALLERS
Amcor -9.53% AUD 14.91
ARB Corporation -5.69% AUD 30.52
Ramsay Health Care -4.83% AUD 61.87
Fortescue Metals Group -4.08% AUD 19.99
Pexa Group -3.5% AUD 12.70

S&P/NZX 50 -129.82 (-1.08%) 11,907.99

RISERS
Fonterra Shareholders Fund +0.84% NZD 3.60
Stride Property +0.78% NZD 1.290
Meridian Energy +0.75% NZD 5.40
EBOS +0.25% NZD 43.80
Mercury NZ +0.23% NZD 6.41

FALLERS
Westpac Banking Corporation -4.14% NZD 23.60
Fletcher Building -3.37% NZD 4.59
A2 Milk -3.21% NZD 5.72
ANZ Holdings -2.91% NZD 25.71
Oceania Healthcare -2.82% NZD 0.690