Asian markets drift after US Fed stays course
MUMBAI, India (AP) — Asian stock markets were uninspired by an upbeat report on the U.S. economy, with most drifting lower Thursday after the U.S. Federal Reserve said it would make further cuts to its monetary stimulus as expected.
KEEPING SCORE: The Hang Seng in Hong Kong slipped 0.1 percent to 24,695.71 while Tokyo's Nikkei was up 0.4 percent to 15,711.94. South Korea's Kospi shed 0.3 percent to 2,076.14 and China's Shanghai Composite was nearly flat at 2,283.72. Australia's S&P/ASX 200 edged up 0.2 percent to 5,632.20 and India's Sensex was flat at 25,076.01.
SORRY SAMSUNG: Shares of South Korean consumer electronics kingpin Samsung dived 4 percent after it reported a bigger-than-expected fall in second quarter profit on slowing smartphone sales. Cheaper upstarts such as China's Huawei are eroding its market share in developing nations and Samsung was uncertain if smartphone earnings would improve this quarter. April-June quarter net profit dropped 20 percent to 6.3 trillion won ($6.1 billion).
FED FOCUS: Federal Reserve policymakers said the central bank would make further cuts to its monthly bond purchases, a program that is intended to keep long-term interest rates low and encourage borrowing and spending. At the current pace of cutbacks, the Fed's bond purchases will end in October.
U.S. GROWTH: The U.S. economy expanded by a better-than-expected 4 percent in the second quarter after a severe winter hit the first quarter's growth. Even so, it was a robust outcome for the world's largest economy.
ANALYST TAKE: Jack Ablin, chief investment officer at BMO Private Bank, said the strong U.S. growth report failed to inspire enthusiasm in the stock market because higher growth and the prospect of inflation will force the Fed to raise interest rates sooner rather than later. "Good news is getting to be bad news again," Ablin said. "The GDP report is obviously good news, so why are stocks off? Because people are wondering when the party will come to an end."
BUSY WEEK: It's a busy week for economic news. Besides the Federal Reserve meeting and U.S. growth numbers, there's a report on China's manufacturing industry out Thursday, and the U.S. Labor Department releases its monthly jobs report on Friday.
OIL, CURRENCIES: Benchmark U.S. crude for September delivery dropped 77 cents to $99.57 a barrel. The euro strengthened to $1.3398 from $1.3995 late Wednesday. The dollar slipped to 102.76 yen from 102.86 yen.
WALL STREET: The Dow Jones industrial average slipped 0.2 percent to close at 16,880.36. The Standard & Poor's 500 ended with a tiny gain of 0.01 percent at 1,970.07.