Asian stocks mix, European stocks decline on Fed policy hope

Gulf Today Report 

Asian stocks remain mix as all eyes are on the outcome of the Federal Reserve policy meeting. 

Shares rose in Hong Kong and Tokyo but fell in Seoul and Sydney. Shanghai didn’t have a significant change. 

Tokyo's Nikkei 225 index added 0.3% to 28,635.21, while the Hang Seng in Hong Kong edged 0.1% higher to 29,429.26. The Kospi in South Korea sank 0.6% to 3,122.56, while the Shanghai Composite index was virtually unchanged, at 3,568.90. 

According to analysts, it is expected that the Fed will be keeping its supportive policy stance unchanged due to the slow pace of economic recovery.

In a commentary, Stephen Innes of Axi expressed the market likely lost for the first half of 2021 due to the surge in the virus. 

" Some are even concerned that vaccines may not prove useful enough to eradicate the virus. And these concerns will continue to linger over markets like a dark cloud until vaccine distributions get ironed out, and a definitive drop in contagion levels can thoroughly support the vaccine efficacy results,” he added. 

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European stocks 

European stocks fell on Wednesday as technology and mining sectors record losses and investors await US Federal Reserve’s policy decision.           

The pan-European STOXX 600 index was down 0.02% following losses in Asian markets and Wall Street.

Despite Microsoft overnight gain, Europe’s tech sector fell by 0.9%. On the other hand, miners took a hit as Fresnillo Plc forecast lower gold output for the current year.

Meanwhile, the surge in coronavirus has affected the European economy with Europe being the worst-affected region. 

"Equity markets are mixed even with a positive earnings season in the United States amid fears regarding the rollout of the vaccine and production capabilities," Sebastien Galy, macro strategist at Nordea Asset Management said in a note.

European earnings have come in largely positive, with analysts projecting a 24% drop in fourth-quarter profit for companies listed on the STOXX 600, slightly better than a 26% drop forecast a week ago, as per Refnitiv IBES data.