Investing.com - Asian stocks fell in Thursday trade, with financial issues dragging regional markets lower as dealers reacted negatively to the results of the U.S. Federal Reserve’s latest policy meeting.
During early Asian trade, Hong Kong’s Hang Seng Index fell 1% to 18,824.20, Japan’s Nikkei 225 Index lost 1.4% to 8,618.38, while Australia’s S&P/ASX 200 sank 2.5% to 3,970.10.
Along with the Nikkei, the broader-based Topix Index of all issues listed on the first section of the Tokyo Stock Exchange dropped 1.38% to 746.66.
At the conclusion of its two-day Federal Open Market Committee Meeting Wednesday, the U.S. Federal Reserve said it would be replacing a portion of the short-term debt in its portfolio with longer-term Treasuries in a move known as “Operation Twist.”
The projected USD400 billion debt-swap was highly anticipated by the market and was expected to relieve the Fed from the need to resume additional money creation steps.
“There are significant downside risks to the economic outlook, including strains in global financial markets,” the Fed said in a statement, with a reference to the ongoing debt crisis in the euro-zone.
The Fed voted to leave its benchmark interest rate at near zero through the middle of 2013, a rate that has been in place since December of 2008.
Wall Street investors appeared largely unimpressed by the Fed’s announcement, as the Dow Jones Industrial Average sank 2.49%, the Nasdaq Composite Index fell 2.01%, and the S&P 500 slumped 2.94% by the end of Wednesday trade.
Elsewhere, the National Association of Realtors reported Wednesday that sales of existing homes in the U.S. rose by 7.7% to a seasonally adjusted 5.03 million units in August, well above market expectations of a 1.7% gain.
Bank and financial issues led decliners in Tokyo morning trade, with Shinsei Bank Ltd. slumping 3.5%, Mizuho Financial Group Inc. falling 1.8% and Sumitomo Mitsui Financial Group Inc. dropping 2.4%.
The trading halt on Nippon Steel Corp. and Sumitomo Metal Industries Ltd. issues was lifted as the two firms were expected to announce details of their merger.
KDDI Corp. shares rose 1.9% on a Dow Jones report that the Japanese telecommunications company had secured the rights to market Apple’s IPhone in Japan from previous distributor Softbank Corp.
Softbank shares plummeted 8.7% in early trade.
In Sydney, resource leader Rio Tinto PLC was reported narrowing down its choices to take over operation of one its South African coal mines. Rio TInto shares were down 0.33%.
The outlook for European stocks was optimistic. France’s CAC 40 futures was higher by 0.17% to 2,881.80, Britain’s FTSE 100 futures inched up 0.02% to 5,159.90, while Germany’s DAX futures gained 0.17% to 5,543.50.