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Asian stocks struggle for momentum ahead of Fed decision


Asian stocks struggled for direction ahead of an interest rate decision from the US Federal Reserve, while China’s currency gained more ground against the dollar.

China’s CSI 300 index of Shanghai- and Shenzhen-listed stocks fell 0.3 per cent in early trading on Wednesday as Japan’s Topix index and Hong Kong’s Hang Seng both rose 0.3 per cent.

Overnight on Wall Street, the S&P 500 closed 0.5 per cent higher while the tech-focused Nasdaq Composite rose 1.2 per cent. Those moves came as the US central bank began a two-day meeting that will be closely watched by investors for signs of renewed stimulus measures.

“There’s a risk the market is underwhelmed by the guidance provided by the Fed,” said Tapas Strickland, an economist at National Australia Bank.

Mr Strickland said there were expectations the Fed would step in with more monetary stimulus since the US Congress has been unable to push through its own coronavirus support package.

“Markets will be focused on any changes to [the Fed’s] forward guidance and to any balance sheet adjustments,” he added.

Futures tipped the S&P 500 to edge down 0.1 per cent when trading begins on Wall Street later on Wednesday. London’s FTSE 100 was expected to shed 0.7 per cent, futures trading suggested.

China’s currency continued to strengthen against the dollar, with the onshore-traded renminbi rising 0.2 per cent to a fresh 16-month high of Rmb6.7672 against the greenback.

The gains built on momentum stoked on Tuesday by official data showing Chinese retail sales in August rose for the first time since the start of the coronavirus pandemic.



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