CANBERA (dpa-AFX) - Asian stock markets are mostly lower on Thursday after the U.S. Federal Reserve projected a sharp contraction for the U.S. economy this year due to the coronavirus pandemic and indicated that interest rates are likely to remain at current near-zero levels through 2022.
In addition, the Organisation for Economic Cooperation and Development or OECD said in its latest Economic Outlook that the global economy is undergoing the deepest recession since the Great Depression in the 1930s, due to the COVID-19 pandemic.
The Australian market is notably lower following the Federal Reserve's monetary policy announcement.
The benchmark S&P/ASX 200 Index is losing 80.60 points or 1.31 percent to 6,067.80, after touching a low of 6,038.30 earlier. The broader All Ordinaries Index is lower by 77.70 points or 1.24 percent to 6,191.60. Australian stocks closed marginally higher on Wednesday to extend gains for a seventh straight day.
The big four banks are among the major losers. ANZ Banking, National Australia Bank and Westpac are lower in a range of 3.1 percent to 3.4 percent, while Commonwealth Bank is lower by more than 2 percent.
In the oil sector, Santos and Woodside Petroleum are losing almost 3 percent each, while Oil Search is lower by more than 2 percent even as crude oil prices rose overnight.
Among the major miners, Rio Tinto, BHP and Fortescue Metals are all declining almost 1 percent each.
Bucking the trend, gold miners are higher even as gold prices edged lower overnight. Newcrest Mining is gaining almost 4 percent and Evolution Mining is rising more than 2 percent.
JB Hi-Fi has raised its full-year profit outlook following a surge in sales since March, reflecting strong demand for home appliances and technology products as customers worked from home. The electronics and appliances retailer's shares are adding 0.3 percent.
On the economic front, Australia will see June projections for the consumer price forecast from the Melbourne Institute today.
In the currency market, the Australian dollar is unchanged against the U.S. dollar on Thursday, after hitting a nearly one-year high of $0.7064 earlier. The local unit was quoted at $0.6995, the same value as at the close on Wednesday.
The Japanese market is declining and the yen strengthened against the dollar following the U.S. Federal Reserve's monetary policy decision and the OECD's economic outlook.
The benchmark Nikkei 225 Index is down 207.91 points or 0.90 percent to 22,917.04, after touching a low of 22,791.53 in early trades. Japanese shares closed mixed on Wednesday.
Market heavyweight SoftBank Group is down 0.2 percent and Fast Retailing is declining more than 1 percent.
Meanwhile, the major exporters are higher despite a stronger yen. Panasonic and Canon is rising more than 2 percent each, while Sony and Mitsubishi Electric are adding more than 1 percent each.
In the tech space, Advantest is up 0.2 percent, while Tokyo Electron is edging down 0.1 percent. Among automakers, Honda Motor is losing more than 4 percent and Toyota is declining more than 1 percent.
In the oil sector, Inpex is down more than 3 percent and Japan Petroleum is lower by more than 2 percent even as crude oil prices rose overnight.
Among the major gainers, NTT Docomo, Dena Co., Chughai Pharmaceutical and Ajinomoto Co. are rising more than 1 percent each.
On the flip side, Nippon Suisan Kaisha and Shimizu Corp. are losing almost 3 percent each, while Kajima Corp. and Maruha Nichiro are lower by almost 2 percent each.
In economic news, Japan will see first-quarter results for the large manufacturing index from BSI.
In the currency market, the U.S. dollar is trading in the 107 yen-range on Thursday.
Elsewhere in Asia, Singapore is losing almost 2 percent, while Shanghai, New Zealand, Indonesia and Hong Kong are also lower. South Korea, Taiwan and Malaysia are little changed.
On Wall Street, stocks closed mixed in a volatile session on Wednesday after the Federal Reserve announced its widely expected decision to maintain the target range for the federal funds rate at zero to 0.25 percent and indicated that interest rates are likely to remain at current near-zero levels through 2022. The Fed projects real GDP to nosedive by 6.5 percent in 2020, as the ongoing public health crisis weighs heavily on economic activity.
While the Nasdaq advanced 66.59 points or 0.7 percent to a new record closing high of 10,020.35, the Dow tumbled 282.31 points or 1 percent to 26,989.99 and the S&P 500 slid 17.04 points or 0.5 percent to 3,190.14.
The major European markets all moved to the downside on Wednesday. While the U.K.'s FTSE 100 Index edged down by 0.1 percent, the German DAX Index and the French CAC 40 Index slid by 0.7 percent and 0.8 percent, respectively.
Crude oil futures ended notably higher on Wednesday, rebounding from the day's lows, despite data showing an increase in U.S. crude inventories in the week ended June 5. WTI crude for July delivery climbed $0.66 or about 1.7 percent to $39.60 a barrel.
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