Asian Shares Slip Amid Caution Over Fed Meeting Outcome

Asian stocks gave up early gains to end broadly lower on Wednesday ahead of the Federal Reserve’s monetary policy announcement due out later in the day.

A 50 basis point rate hike and the launch of balance sheet reduction are on the table, with market participants certainly fearing a more hawkish tone to fight inflation, which is at a four-decade high.

Investors will be watching to see how Fed Chair Jerome Powell frames the future outlook.

Geopolitical tensions also remained on investors’ radar as the EU proposed a gradual ban on Russian oil in the sixth round of sanctions against Moscow.

Markets in China and Japan were closed for holidays. Hong Kong’s Hang Seng Index slumped 1.1 percent to 20,869.52, with shares of Tencent and Alibaba declining 3-4 percent.

Australian markets ended a choppy session slightly lower, with gold and mining stocks pacing the declines on lingering demand worries over top metals consumer China. The benchmark S&P/ASX 200 Index slipped 0.2 percent to 7,304.70.

Banks bucked the weak trend as ANZ beat estimates for first-half profit. In economic releases, the latest retail sales and service sector activity readings painted a positive picture of the economy.

New Zealand’s benchmark S&P/NZX 50 Index finished marginally lower at 11,675.21 after the Reserve Bank said near-term risks to the financial system have increased and that a larger correction in the property market remains a possibility.

New Zealand unemployment held at a record low in the first three months of the year, government data showed earlier in the day.

South Korea’s Kospi average ended 0.1 percent lower at 2,677.57, extending losses for the third day running.

Overnight, U.S. stocks finished slightly higher after the release of positive data on factory orders and job openings.

The Dow and the tech-heavy Nasdaq Composite both inched up around 0.2 percent, while the S&P 500 gained half a percent.

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