Asian Stocks Remain Flat Ahead of Fed Meeting; KOSPI Shows Strong Performance Thanks to AI Optimism

Asian Stocks Remain Flat Ahead of Fed Meeting; KOSPI Shows Strong Performance Thanks to AI Optimism

© Reuters.– Most Asian stocks settled in cautious trading on Wednesday as markets awaited further guidance on U.S. interest rates following the conclusion of a Federal Reserve meeting later in the day.

Regional markets were encouraged by the Bank of Japan taking a largely dovish stance on Tuesday, even as it raised interest rates for the first time in 17 years. But Japanese markets were closed on Wednesday, limiting Asian trading volumes.

Wall Street indices closed higher overnight thanks to some strength in technology and energy stocks. But U.S. stock index futures fell slightly in Asian trading, amid growing concern over the Fed.

KOSPI outperforms as Samsung joins Nvidia AI partnership

South Korea was the best performer in Asia, rising 1.1% on a 4.4% rise in Samsung Electronics Co Ltd (KS:).

The electronics conglomerate jumped after the Nikkei reported that NVIDIA Corporation (NASDAQ:) plans to use Samsung’s high-bandwidth memory chips in its artificial intelligence processors.

SK Hynix Inc. (KS:), which currently makes the most advanced HBM chips, fell almost 3% on the prospect of increased competition from Samsung.

Asian stocks generally down in the face of Fed caution

With the exception of the KOSPI, other Asian stock indexes were largely treading water on Wednesday as investors stayed away from big bets ahead of the Fed.

China’s and Hong Kong’s indexes remained stable, as did Hong Kong’s, after the People’s Bank of China kept its benchmark unchanged, as widely expected.

Australia’s rose slightly, extending its gains after the tone was less hawkish than markets expected on Tuesday.

For India, the index indicated a slightly positive opening. The Nifty and the were poised to rebound after falling more than 1% each on Tuesday.

Markets were largely focused on the conclusion of a Fed meeting later Wednesday. Although the central bank is widely expected to do so, any signals regarding its plans to cut interest rates in 2024 will be closely watched.

Particular emphasis is placed on the Fed’s policy statement, as well as the meeting with Chairman Jerome Powell after the meeting.

Markets were particularly wary of any hawkish signals after higher-than-expected inflation figures over the past two months.

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