Asian Stocks Take a Beating as Investors Digest Fed’s Grim Picture of U.S. Recovery

By Gina Lee

Investing.com – Asian stocks were down on Thursday morning, after the U.S. Federal Reserve painted a grim picture of the U.S. recovery from the COVID-19 virus on Wednesday as it wrapped up its policy meeting.

Its quarterly predictions pointed to a long road towards recovery, with GDP forecast to contract by 6.5% in 2020 and unemployment to fall to 9.3% in the final three months of the year from May’s 13.3%.

The picture soured investor sentiment, with Japan’s Nikkei 225 down 1.25% by 10:55 PM ET (3:55 AM GMT) and South Korea’s KOSPI falling 0.14%.

Down Under, the ASX 200 slid 2.19%.

Hong Kong’s Hang Seng Index fell 0.39%. Meanwhile, China’s NetEase (HK:9999) made a soaring debut into the Hong Kong market, with shares rising to above 9% of their issue price on the first day of trading.

China’s Shanghai Composite was down 0.12% while the SZSE Component was up 0.27%.

The Fed also decided during the meeting to hold its policy benchmark near zero, with official forecasts largely predicting it to stay there through 2022.

Chair Jerome Powell told a video conference on Wednesday that “we’re not even thinking about thinking about raising rates.”