Asian Shares Retreat As Investors Await Crucial Fed Decision

Asian stocks ended broadly lower on Wednesday as investors adopted a cautious approach ahead of the U.S. Federal Reserve’s monetary policy announcement due later in the day.

Amid soaring inflation across the globe due to rising demand and supply bottlenecks, the U.S. central bank is expected to announce its stimulus tapering timeline. The Japanese stock market was closed in observance of Culture Day.

Chinese shares ended slightly lower as new locally transmitted COVID-19 cases in the country spiked to a nearly three-month high and Premier Li Keqiang warned of downward economic pressure. Traders also looked ahead to a major Chinese Communist Party gathering to be held November 8-11.

The benchmark Shanghai Composite Index slipped 7.09 points, or 0.2 percent, to close at 3,498.54, while Hong Kong’s Hang Seng Index dropped 74.92 points, or 0.3 percent, to 25,024.75.

Growth in the Chinese services sector accelerated in October, the latest survey from Caixin showed earlier in the day, with a services PMI score of 53.8. That was up from 53.4 in September as new business expanded at a stronger rate at the start of the fourth quarter. The composite index ticked up to 51.5 from 51.4 in September.

Australian markets rallied after RBA Governor Philip Lowe said he has no plans to hike rates next year. The benchmark S&P/ASX 200 Index climbed 68.40 points, or 0.9 percent, to 7,392.70, while the broader All Ordinaries Index ended up 66.40 points, or 0.9 percent, at 7,713.

Commonwealth Bank of Australia shares rose 1.2 percent after the lender said it would offer retail clients crypto services. ANZ jumped 2.3 percent and NAB added 1.4 percent.

Miners rebounded, with heavyweights BHP and Rio Tinto ending up over 1 percent each. Smaller rival Fortescue Metals Group jumped 3.1 percent. Energy stocks ended mixed, with Whitehaven Coal surging 3.8 percent.

Seoul stocks tumbled, with the Kospi ending down 37.78 points, or 1.3 percent, at 2,975.71 as investors awaited clues on the timeline for tapering from this week’s FOMC meeting.

Market bellwether Samsung Electronics lost 1.54 percent, No. 2 chipmaker SK Hynix declined 1.9 percent and internet portal operator Naver gave up 1.8 percent.

New Zealand shares gave up early gains to end on a flat note amid bets that the Reserve Bank might raise rates more aggressively.

A government report showed earlier in the day that the country’s unemployment rate fell to 3.4 percent in the third quarter, the lowest rate since the fourth quarter of 2007.

AMP shares jumped 7.1 percent after the financial services giant, which is dual listed in Australia and New Zealand, sold its remaining stake in its life insurance business.

U.S. stocks rose modestly to hit new record highs overnight as earnings optimism prevailed and the two-day FOMC meeting got underway.

The Dow and the S&P 500 rose around 0.4 percent each, while the tech-heavy Nasdaq Composite gained 0.3 percent.

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