SEOUL, South Korea (AP) — Asian stock markets were mostly lower Thursday after the Federal Reserve cuts its forecast for U.S. economic growth, a move that could delay Fed rate hikes but also suggests reduced American demand for Asia's exports.
KEEPING SCORE: Tokyo's Nikkei 225 fell 0.6 percent to 20,098.92 and Hong Kong's Hang Seng inched down 0.1 percent to 26,722.68. Australia's S&P/ASX 200 was down 1 percent to 5,517.10. South Korea's Kospi outperformed the region, rising 0.8 percent to 2,050.20. Stocks in mainland China and Singapore declined.
THE FED: The Federal Reserve said in a statement after its latest policy meeting that it wants to see further economic gains and higher inflation before raising interest rates from record lows. The policymakers, while noting a strengthening U.S. economy, sharply lowered their estimate of growth this year, from a range of 2.3 percent to 2.7 percent estimated in March to a range of 1.8 percent to 2 percent. The downgrade reflects the economy's contraction in the January-march quarter, which resulted in part from a brutal winter.
ANALYST'S TAKE: "While the decision not to raise interest rates this time was as expected, the decision to cut its GDP forecast for the second time in a row suggested to the markets that U.S. economic growth is still less than expected," Nicholas Teo, an analyst at CMC Markets, said in a commentary. "This cut in the GDP forecast pretty much rules out an interest rate hike in July and makes September unlikely unless the economy turns around in a big way soon."
WALL STREET: Stocks edged higher Wednesday. The Dow Jones industrial average gained 0.2 percent to 17,935.74. The Standard & Poor's 500 rose 0.2 percent to 2,100.44. The Nasdaq composite added 0.2 percent to 5,064.88.
ENERGY: Benchmark U.S. crude fell 29 cents to $59.63 per barrel in electronic trading on the New York Mercantile Exchange. The contract closed up 5 cents at $59.92 per barrel in New York on Wednesday. Brent crude, a benchmark for international oil used by many U.S. refineries, declined 17 cents to $63.70 in London.
CURRENCIES: The dollar weakened to 123.14 yen from 123.58 yen in the previous trading session. The euro strengthened slightly to $1.1360 from $1.1350.