Nikkei Asia300 Index logs first weekly loss since April after Fed move
HONG KONG (Nikkei Markets) - Asian stocks outside of Japan posted their first weekly loss in eight weeks after the U.S. Federal Reserve raised interest rates and signaled another increase this year.
The Nikkei Asia300 Index ended unchanged at 1,238.76 Friday, but shed 1% for the week. Hong Kong's gauge led losses with a drop of 1.8% as developers in the city came under pressure after the Hong Kong Monetary Authority raised its policy interest rate by 0.25 percentage points Thursday, following the Fed's rate increase. Hang Lung Properties slid 7.1% this week, while New World Development and Henderson Land Development shed at least 3% each.
The U.S. central bank on Wednesday raised interest rates by 25 basis points, reiterated its outlook for another increase in 2017 and outlined plans to scale back its $4.5-trillion balance sheet. The increase was widely expected, but markets were hoping for a softer stance of future tightening as the world's largest economy contends with uncertainty about U.S. President Donald Trump's policies and mixed datasets.
"Financial markets were caught completely off guard during late trading on Wednesday after the Federal Reserve adopted a firmly hawkish stance and even displayed some optimism over economic growth despite mounting concerns over weak inflation," Lukman Otunuga, a research analyst at FXTM, wrote in a note.
Lenders and rate-sensitive developers in Singapore fell after the Fed's move as borrowing costs in the city state are largely determined by moves in U.S. interest rates. Singapore's central bank uses the exchange rate to guide monetary policy instead of interest rates.
Malaysia's index was little changed as lenders advanced, with CIMB Group Holdings adding 1.5% and Malayan Banking climbing 0.6% for the week. Glovemaker Top Glove fell 4.1% this week after a more than 7% jump last week.
Regional technology stocks faltered after a selloff last Friday and on Monday on the technology-heavy Nasdaq Composite. South Korea's Naver fell 7% this week and Tencent Holdings shed 1.7% in Hong Kong. Personal computer maker Lenovo Group lost 1.8%.
Samsung Electronics, the heaviest weighted stock on the gauge, slipped 1.1% this week. The country gauge for South Korea fell 1%.
Energy producers in Asia were under pressure as Brent crude prices headed for their fourth consecutive weekly loss. China Petroleum & Chemical (Sinopec) and PetroChina fell at least 1.7% each in Hong Kong, while Sapura Energy lost 2.6% in Kuala Lumpur.
Chinese automaker Great Wall Motor Co was among the best performers on the 316-stock Nikkei Asia300 Index this week, rising more than 10% in Hong Kong.
Astro Malaysia Holdings rallied 5.1% in Kuala Lumpur amid expectations that a stronger ringgit will help it control costs on overseas content. Earlier this week, the television services provider reported a 3.1% decline in net profits for the fiscal first quarter.
Dongfeng Motor Group rose 9.9% in Hong Kong. Earlier this week, Dongfeng Automobile said it will transfer its stake in Zhengzhou Nissan to controlling shareholder Dongfeng Motor Company.
In Southeast Asia, the country gauges for Indonesia and Vietnam rose at least 1% this week, while Thailand's index advanced 0.8%. India's index fell 0.9% since last Friday.
--Nimesh Vora and V. Phani Kumar