Asian markets lose steam as investors take a step back

Markets in Asia sank on Friday, as investors took their winnings on the last day of the trading week. The United States (US) Federal Reserve’s statement to raise interest rates in the months to come also tempered the appetite of some investors, leading to cautious trading for the day.

Malaysia and Singapore shares opened lower, with Singapore’s Straits Times Index retreating 22.32 points or 0.72% at 3,070.92, around 2.00pm Singapore time. Australia’s S&P/ASX 200 which opened flat, dipped 0.11%.

Japanese stocks, which opened lower following the previous day’s rally, saw its Nikkei 225 at 0.76% or 170.94 points lower, at 22,315.98 while the Topix index dipped 0.29% by mid-afternoon.

China and Hong Kong stocks faced heavier shedding. The Hang Seng Index fell 2.45% or 640.99 points at 25,586.73, while the Shanghai Composite Index declined 1.15% or 29.77 points at 2,605.86. The smaller Shenzhen Composite Index was lower by 1.05 points or 0.08%, at 1,332.93.

Over on Wall Street, the benchmark Dow Jones Industrial Average hovered between red and green the entire day before ending the session flat, up 0.04% or 10.92 points at 26,191.22. Nasdaq sank 0.5% to 7,529.92 while S&P 500 dipped 0.3% to end at 2,806.83.

Federal Reserve's decision

Investors are trading cautiously in lieu of the Fed’s unwavering decision to have more “gradual” interest rate hikes.

The Fed kept interest rates unchanged this month, it said in a statement released after the conclusion of a two-day policy discussion meeting in Washington on Thursday. In the statement, the Fed said US’ labour market continues to strengthen, and economic activity have been rising at a strong rate.

The Fed is expected to raise the key interest rate for the fourth time this year at the December meeting, but there are no fixed targets set for next year. Some economists expect two Fed rate hikes while others think four hikes may be done to guard against high inflation.