Investing.com - Asian shares mostly fell on Thursday with signs that increasingly downbeat assessments of China's economy have hit regional and global sentiment.
The Nikkei 225 was down 0.05%, while the S&P/ASX 200 eased 1.32% and the Hang Seng index eased 1.23%. Bucking the trend, the Shanghai Composite rose 1.08% before the break - but has shown sharp volatility this week on the downside.
The latest Federal Reserve meeting highlighted concern over the state of the global economy, driving markets to question the likelihood that the Fed will raise rates next month.
The minutes showed policymakers continued to express broad concerns about lagging inflation and the weak world economy even as the U.S. job market improved further. Market expectations for a Fed hike in September fell from one in two to roughly one in three after the minutes were published.
"It looks like based on commodity prices, China, wages not really picking up, that [Fed officials] are not getting any closer to meeting their inflation target and seems like they're probably not going to be willing to go in September" with a rate hike, said Don Ellenberger, head of multi-sector strategies at Federated Investors in Pittsburgh.
A delay in the start of the tightening cycle is seen as supportive of equities. However, concern about the strength of the global economy.
Overnight, U.S. stocks experienced a wild session of unpredictable, volatile trading, paring significant losses after the Federal Reserve provided no clear indications on an imminent interest rate hike midway through Wednesday afternoon, before again falling precipitously near the close.
After completing the roller coaster day of trading came to a halt, the Dow Jones Industrial Average and the NASDAQ both fell sharply moving to nearly its lowest level in a month. The S&P 500 Composite index also suffered significant losses, as a massive sell-off in crude stocks and continued instability in China weighed on all three major indices. The Dow fell 162.61 or 0.93% to 17,348.73, while the NASDAQ dropped 40.30 or 0.80% to close Wednesday's session at 5,019.05.
The S&P 500, meanwhile, lost 17.31 or 0.83% to 2,079.61, as eight of 10 sectors closed in the red. Stocks in the Energy, Basic Materials and Industrials sectors lagged, each falling by more than 0.95% on the day.
When the Federal Open Market Committee last met three weeks ago, the minutes from its July meeting showed that the Fed determined that conditions for a hike in short-term interest rates had not yet been achieved. The FOMC appeared to be particularly vague when it came to their forecasts on inflationary growth. The Fed, according to the minutes, said by some objectives the inflation data was "not progressing" toward its targeted goal. Other members, however, said that inflation conditions for a rate hike would be met or could be "met shortly."
Relatively muted gains in the Consumer Price Index for July could appease the dovish viewpoints on the Fed for a delayed rate hike beyond September. On Wednesday morning, the Bureau of Labor Statistics said its CPI for July ticked up 0.1%, amid record declines in airfare prices. The Core CPI, which strips out food and energy prices, rose by 1.8% on a year-over-year basis after remaining unchanged from June. The Fed has indicated that it could start to raise rates when it is "reasonably confident" that long-term inflation is moving toward its targeted goal of 2%.