Markets in Asia-Pacific Mostly Rise as the Fed Predicts More Pain to Come

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Asia-Pacific markets traded higher as the Federal Reserve signalled further rate hikes soon.

The U.S. ADP private payrolls report said employers added 235,000 jobs in December, making it the lowest monthly job. Still, it shows a solid labour market despite the Fed’s attempts to tame inflation. This suggests there is still room for interest rates to go higher.

Australia’s S&P/ASX 200 Index rose 0.65%, South Korea’s Kospi index climbed 1.12%, and Nikkei 225 rose 0.59%. Hong Kong’s Hang Seng index pared most of its gains and was marginally lower in its final hour of trade as China signalled more supportive measures for its property sector.

This move is seen as a positive sign for the region, particularly for Hong Kong, which has been experiencing a sluggish property market recently. The new measures are expected to bring some relief to developers, homeowners and first-time buyers alike.

“Chinese companies are getting pretty competitive for iPhone assemblers. China is doing quite well in pretty much everything, aside from semiconductors,” said Yang.

On Wall Street, the Dow closed 300 points lower as investors reacted to the news of a fourth consecutive monthly decline in job growth, signalling that more pain may be ahead. Adding to investor caution were further signs that the global economy may be slowing after recent data showed a contraction in manufacturing activity in China.

Shares of home and leisure retailer Bed, Bath & Beyond dropped nearly 30% in premarket trading after the company announced that it had run short on cash and was considering bankruptcy. The news put all three major US indexes on track to notch five weeks of losses.

The Federal Reserve’s decision to leave interest rates unchanged signals more pain ahead for the U.S. economy. Widespread uncertainty caused by a drop in job growth and a contraction in global manufacturing activity means investors are increasingly cautious.

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