Asian shares fall after Fed-driven rally
Markets in Hong Kong, mainland China, Taiwan, South Korea and Malaysia are closed due to the Mid-Autumn Festival
Asian shares fell Friday after a global rally powered by the US Federal Reserve’s decision to maintain its vast stimulus programme, with a surprise interest rate hike dragging down Indian stocks.
Tokyo slipped 0.16 per cent, or 23.76 points, to 14,742.42 as the dollar held firm on better-than-expected US economic data. Sydney fell 0.36 per cent, or 18.8 points, to 5,276.7.
Mumbai plunged 2.45 per cent in afternoon trade after India’s new central bank governor, Raghuram Rajan, surprised markets with a bold decision to hike interest rates on fears of rising inflation.
Today looks like being one of those Fridays where markets take stock after a big news week
Rajan increased the benchmark interest lending rate to 7.50 per cent from 7.25 at his first policy review meeting since taking the reins.
He had been widely forecast by economists to keep rates on hold despite annual inflation hitting an unexpected six-month high of 6.1 per cent this week.
Markets in Seoul, Shanghai, Hong Kong and Taiwan were closed for public holidays.
Stock markets across the globe jumped following the Fed’s announcement on Wednesday that it would hold off from tapering its US$85-billion-a-month bond-buying scheme.
Developing economies such as Indonesia, the Philippines and India breathed a sigh of relief after suffering a heavy sell-off in August as investors bet on the Fed winding down its quantitative easing (QE) policy.