Investing.com - Asian stocks were mixed to lower Thursday after the Federal Reserve in the U.S. announced less drastic easing measures to stimulate the economy.
During Asian trading on Thursday, Hong Kong's Hang Seng Index was down 0.50%, Australia's S&P/ASX200 was down 0.65%, while Japan’s Nikkei 225 Index was up 0.89%.
Stocks dipped in Asian trading on news the Federal Reserve moved to bolster the economy by expanding a USD400 billion program that shuffles its Treasury holdings, known as Operation Twist, by another USD267 billion.
In the U.S., the Federal Reserve held benchmark interest rates unchanged at 0.25%, but admitted headwinds face the U.S. economy and announced it would expand its Operation Twist program to spur recovery
Under Operation Twist, the Fed purchases Treasury securities with remaining maturities of 6 years to 30 years while selling an equal amount of Treasury securities with remaining maturities of 3 years or less with the aim of keeping long-term interest rates low.
While easing measures tend boost stocks, the market held expectations that the Fed would resort to a more aggressive stimulus tool known as quantitative easing, under which the Fed steps in and buys Treasurys and other assets directly from banks, injecting the economy full of liquidity in the process to encourage economic recovery and hiring.
As a side effect of quantitative easing, the dollar weakens and stocks rise amid a surge of liquidity that holds interest rates down.
Furthermore, the act of easing in itself reflects a sluggish recovery in the U.S., a large Asian export market, though Japanese shares rose on sentiment that the stronger dollar that comes with the absence of quantitative easing will give its exports an edge.
Meanwhile, New Zealand reported that its gross domestic product grew 1.1% in the first quarter of this year, well above expectations for 0.5% growth thanks to robust agriculture and manufacturing sectors.
The New Zealand economy grew 0.4% in the fourth quarter of last year.
In Hong Kong, top decliners included Tencent, down 3.63%, CNOOC, down 3.29%, and China Shinhua, down 2.61%.
In Australia, top decliners included Bathurst Resources, down 4.44%, Lynas Corp., down 4.43%, and Myer Holdings, down 3.93%.
European stock futures indicated a lower opening.
France's CAC 40 futures pointed to a loss of 0.54%, while Germany's DAX 30 futures signaled a loss of 0.43%. Meanwhile, in the U.K., the FTSE 100 futures indicated a loss of 0.45%.
Dow Jones Industrial Average futures were down 0.31% while the S&P 500 futures were down 0.38%.
Later Thursday, the eurozone will release preliminary data on manufacturing and service-sector output, while Germany and France will release individual reports.
Also on Thursday, ECB President Mario Draghi is due to speak, and his comments will be closely watched.
The U.S. will unveil weekly initial jobless claims followed by preliminary data on manufacturing activity and an industry report on existing home sales.
The country is also to release data on manufacturing activity in the Philadelphia area.
During Asian trading on Thursday, Hong Kong's Hang Seng Index was down 0.50%, Australia's S&P/ASX200 was down 0.65%, while Japan’s Nikkei 225 Index was up 0.89%.
Stocks dipped in Asian trading on news the Federal Reserve moved to bolster the economy by expanding a USD400 billion program that shuffles its Treasury holdings, known as Operation Twist, by another USD267 billion.
In the U.S., the Federal Reserve held benchmark interest rates unchanged at 0.25%, but admitted headwinds face the U.S. economy and announced it would expand its Operation Twist program to spur recovery
Under Operation Twist, the Fed purchases Treasury securities with remaining maturities of 6 years to 30 years while selling an equal amount of Treasury securities with remaining maturities of 3 years or less with the aim of keeping long-term interest rates low.
While easing measures tend boost stocks, the market held expectations that the Fed would resort to a more aggressive stimulus tool known as quantitative easing, under which the Fed steps in and buys Treasurys and other assets directly from banks, injecting the economy full of liquidity in the process to encourage economic recovery and hiring.
As a side effect of quantitative easing, the dollar weakens and stocks rise amid a surge of liquidity that holds interest rates down.
Furthermore, the act of easing in itself reflects a sluggish recovery in the U.S., a large Asian export market, though Japanese shares rose on sentiment that the stronger dollar that comes with the absence of quantitative easing will give its exports an edge.
Meanwhile, New Zealand reported that its gross domestic product grew 1.1% in the first quarter of this year, well above expectations for 0.5% growth thanks to robust agriculture and manufacturing sectors.
The New Zealand economy grew 0.4% in the fourth quarter of last year.
In Hong Kong, top decliners included Tencent, down 3.63%, CNOOC, down 3.29%, and China Shinhua, down 2.61%.
In Australia, top decliners included Bathurst Resources, down 4.44%, Lynas Corp., down 4.43%, and Myer Holdings, down 3.93%.
European stock futures indicated a lower opening.
France's CAC 40 futures pointed to a loss of 0.54%, while Germany's DAX 30 futures signaled a loss of 0.43%. Meanwhile, in the U.K., the FTSE 100 futures indicated a loss of 0.45%.
Dow Jones Industrial Average futures were down 0.31% while the S&P 500 futures were down 0.38%.
Later Thursday, the eurozone will release preliminary data on manufacturing and service-sector output, while Germany and France will release individual reports.
Also on Thursday, ECB President Mario Draghi is due to speak, and his comments will be closely watched.
The U.S. will unveil weekly initial jobless claims followed by preliminary data on manufacturing activity and an industry report on existing home sales.
The country is also to release data on manufacturing activity in the Philadelphia area.