Elsewhere, on Sept 18, European stocks advanced, with Paris and Frankfurt up more than 1% and London higher, while Asia was mixed as Tokyo gained, Hong Kong and Shanghai slipped, and Seoul closed at a record high.
The US Federal Reserve cut its policy rate by 25 basis points (bps) to 4%–4.25% on Sept 17, framing the move as “risk management” amid softer labour data and still-elevated inflation. Newly appointed governor Stephen I. Miran dissented in favour of a 50 bps reduction, while the statement noted that “downside risks to employment have risen” and quantitative tightening continues.
In Singapore on Sept 19, investors considered the implications for banks, REITs and other rate-sensitive counters after local interest rates eased ahead of the Federal Open Market Committee (FOMC) meeting. Morningstar’s Michael Makdad says: “The immediate impact of the Fed’s move this week on Asian banks and interest-rate-sensitive sectors like real estate should be limited.” Lorraine Tan, director of equity research, Asia, at Morningstar, adds that there is less pressure for regional central banks to react given earlier declines in Hong Kong and Singapore funding rates.
