By Alex Ho
Investing.com - Asian markets were mixed on Wednesday morning as the U.S. Federal Reserve cut its benchmark rates as expected.
China’s Shanghai Composite inched up 0.1% by 11:34 PM ET (03:34 GMT), but the Shenzhen Component fell 0.5%. The Caixin/Markit services Purchasing Managers’ Index plunged to 26.5 in February, its worst month on record, from 51.8 in January.
Hong Kong’s Hang Seng Index was little changed.
Japan’s Nikkei 225 was up 0.4%.
South Korea’s KOSPI surged 2.1% after the country’s government said it’s seeking a 11.7 trillion won ($9.8 billion) extra budget to help businesses hit by the world’s second-largest coronavirus outbreak.
The Bank of Korea called an emergency meeting for early Wednesday, but no outcome has been announced yet.
Down under, Australia’s ASX 200 dropped 1.8%. Wednesday's data from the Australian Bureau of Statistics showed the Australian economy accelerated by 0.5% last quarter. Meanwhile, the previous quarter’s GDP was revised upwards to show 0.6% increase from 0.4% earlier.
Economists had predicted a quarterly rate of 0.3%.
Overnight, U.S. stocks ended lower amid an ongoing spread of the coronavirus in the country.
The S&P 500 slumped 2.8%, the Nasdaq Composite lost 3% and the Dow Jones Industrial Average fell 2.95%, or 789 points.
Washington state authorities now report nine deaths from Covid-19, while North Carolina reported its first case and New York reported its second.
The Fed cut its benchmark rate by half a point to a 1%-to-1.25% range. The move was the first such cut since December 2008, during the financial crisis. The news failed to lift U.S. equities, however, as the Fed rate cut was already largely priced in markets and overshadowed by the coronavirus news.
“A move of this size, at or before the committee's next meeting on March 18, was already fully priced in financial markets after a statement from Chair Powell late last week suggested the Fed was ready and willing to take action," RBC said.
Fed Chair Jerome Powell said the central bank had to take action as the coronavirus was having a material impact on the economic outlook.
“The magnitude and persistence of the overall effect on the U.S. economy remain highly uncertain and the situation remains a fluid one,” he told reporters. “Against this background, the committee judged that the risks to the U.S. outlook have changed materially. In response, we have eased the stance of monetary policy to provide some more support to the economy.”
Despite the central bank’s action, President Donald Trump said in a tweet that the cut is not enough.