Asian shares end morning sessions weaker on Fed taper moves

Investing.com - Asian shares fell on Thursday on concerns that the U.S. could push up interest rates earlier than expected, attracting investment away from the region.

The Nikkei started the day in positive territory, but fell as the morning seesion ended, down 0.52%.

Hong Kong's Hang Seng Index fell 1.13%, even though its second largest constituent - Tencent - which has been a substantial driver of the Hong Kong benchmark index so far this year, gained after it reported earnings.

The Chinese Internet giant posted a 13% growth in net profit in the quarter ended Dec. 31, the company's slowest profit growth in nearly two years, but not enough to curb enthusiasm for the stock, which is up 15.5% for the year, compared to an 8% decline on the Hang Seng index.

Elsewhere in Asia, the Shanghai Composite was up 0.35%, Australia's S&P/ASX 200 fell 0.8% and South Korea's Kospi fell 0.7%.

At the close of U.S. trading overnight, the Dow Jones Industrial Average fell 0.62%, the S&P 500 index fell 0.61%, while the Nasdaq Composite index fell 0.59%.

The Fed announced earlier it was leaving interest rates unchanged and reduced the amount of bonds it buys in the open market each month to $55 billion from $65 billion, both moves in line with expectations.

The Fed's asset-purchasing program, which kicked off in 2012 at $85 billion a month, has suppressed long-term interest rates for over a year, sending investors to assets like stocks with the hope investing and hiring ensues.

Elsewhere, the Fed omitted previous language calling for rate hikes if the unemployment rate approaches a 6.5% threshold, a policy tool known as forward guidance.

Even though the economy is improving, a highly accommodative monetary policy stance remains appropriate, the U.S. central bank said.

Stock dropped, however, after Fed Chair Janet Yellen suggested at a press conference that interest rates could rise six months after the bond-buying program ends, which sparked a selloff in equities markets and fueled demand for the dollar.

Yellen's words left many concluding that the Fed's bond-buying program could end this fall while rate hikes could follow in early 2015, which sent investors scrambling to the sidelines.

After the close of European trade, the EURO STOXX 50 rose 0.13%, France's CAC 40 fell 0.12%, while Germany's DAX 30 rose 0.37%. Meanwhile, in the U.K. the FTSE 100 fell 0.49%.

On Thursday, the U.S. is to publish its weekly report on initial jobless claims as well as data on existing home sales and manufacturing activity in the Philadelphia region.