# Global share sell off pauses in Asia as investors await Fed policy update Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2022-01-26 Category: INVESTING Category URL: https://financedigest.com/category/investing Meta Title: Asian Share Markets Steady as Investors Await Fed Policy Update Meta Description: Stay updated on Asian share markets as investors await the U.S. Federal Reserve's policy update. Keep an eye on market trends and potential impacts on URL: https://financedigest.com/global-share-sell-off-pauses-in-asia-as-investors-await-fed-policy-updatehtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/2022-01-26t022022z3lynxmpei0p032rtroptp4global-markets-1736816279376-compressed.jpg) By Stella Qiu and Alun John BEIJING (Reuters) – Asian share markets steadied on Wednesday after three sessions of losses as investors awaited any hints about faster tightening of monetary policy from the U.S. Federal Reserve later in the day. MSCI’s broadest index of Asia-Pacific shares outside Japan slipped 0.1% on Wednesday, after sharp losses earlier in the week which have [left the index off 2.8% this year](https://www.financedigest.com/companies-that-dont-upgrade-their-financial-processes-this-year-will-get-left-behind.html "Companies that don’t upgrade their financial processes this year will get left behind"). It is [testing mid-December’s one-year low](https://www.financedigest.com/planning-to-move-to-the-low-carbon-economy-how-banks-can-plan-today-for-new-stress-tests-arriving-soon-2.html "Planning to move to the low carbon economy: How Banks can plan today for new stress tests arriving soon"). Japan’s Nikkei pared some early losses to trade 0.37% lower, hovering around its lowest [level since](https://www.financedigest.com/optimism-levels-drop-to-low-of-17-percent-according-to-first-survey-since-banking-regulations.html "Optimism levels drop to low of -17 percent, according to first survey since banking regulations") Dec. 2020. The cautious [rebound for shares](https://www.financedigest.com/european-shares-rebound-with-focus-on-italian-politics-earnings.html "European shares rebound with focus on Italian politics, earnings") looked set to continue in Europe, with pan-region Euro Stoxx 50 futures 0.5% higher, and FTSE futures were up 0.8%. Nasdaq futures climbed 0.3% in [Asian trading](https://www.financedigest.com/bny-mellon-joins-asian-development-banks-trade-finance-program.html "BNY Mellon joins Asian Development Bank’s Trade Finance Program"), while the S&P 500 e-minis were flat, after all three main U.S. indices had fallen on Tuesday. The [Fed is due to update its policy](https://www.financedigest.com/stocks-up-bond-yields-fall-as-markets-mull-a-fed-policy-pause.html "Stocks up, bond yields fall as markets mull a Fed policy pause") plan later on Wednesday (1900 GMT) after a two-day meeting, and markets are priced for its first rate hike in March, with three more quarter-point increases by year-end. Asian markets are currently being affected by volatility in global markets, [concerns about Fed tightening in the face of higher inflation](https://www.financedigest.com/shares-rise-but-concern-mounts-over-inflation-flare-up.html "Shares rise, but concern mounts over inflation flare-up") and uncertainty about events in Russia and Ukraine,” said Mansoor Mohi-uddin, chief economist at Bank of Singapore. We [expect the Fed](https://www.financedigest.com/dollar-set-for-weekly-loss-amid-expectations-fed-will-slow-hikes.html "Dollar set for weekly loss amid expectations Fed will slow hikes") meeting, however, will not add to volatility. The central bank is set to only finish its quantitative easing in March and while it will signal [interest rates](https://www.financedigest.com/hotel-investors-should-they-be-worried-about-a-potential-economic-pause-delving-into-inflation-interest-rates-recession-etc.html "‘Hotel Investors – should they be worried about a potential economic pause?’ delving into inflation, interest rates, recession etc") are likely to be raised in March too, the Fed will endorse market expectations for quarterly 25bps hikes for its fed funds rate rather than more aggressive tightening this year,” Mohi-uddin added. Growing tensions as [Russian troops massed on Ukraine’s border have added to a risk-averse environment for investors](https://www.financedigest.com/billionaire-investor-yuri-milner-relinquishes-russian-citizenship.html "Billionaire investor Yuri Milner relinquishes Russian citizenship"). Globally, U.S. stocks posted their worst week [since](https://www.financedigest.com/the-nasdaq-100-on-track-to-have-its-best-week-since-march-2010.html "The Nasdaq 100 On Track to Have its Best Week Since March 2010") 2020 last week, and MSCI’s world index is on course for its biggest monthly drop since the COVID-19 pandemic hit markets in March 2020. However, analysts thought this was unlikely to derail the Fed’s [plans to tighten policy](https://www.financedigest.com/dutch-responds-to-us-china-policy-with-a-plan-to-curb-semiconductor-tech-exports.html "Dutch responds to US China policy with a plan to curb semiconductor tech exports"). As long as [turbulence remains relatively contained to equity markets](https://www.financedigest.com/the-breakfast-cereals-market-to-sail-through-innovation-based-turbulence.html "The Breakfast Cereals Market To Sail Through Innovation-Based Turbulence"), the bar for the Fed becoming dovish is high,” said analysts at Nomura in a note. They said they thought some of the [Fed’s policy](https://www.financedigest.com/asian-shares-rise-dollar-dips-ahead-of-fed-policy-decision.html "Asian shares rise, dollar dips ahead of Fed policy decision") committee would interpret the latest sell off in equities as potentially taking out some of the “froth” in the market, so it would not change their view, especially amid worries about high inflation. On Wednesday, China’s blue-chip index reversed earlier gains to slide 0.33% to its lowest since October 2020, while [Hong Kong’s](https://www.financedigest.com/screening-of-winnie-the-pooh-horror-film-cancelled-in-hong-kong.html "Screening of ‘Winnie the Pooh’ horror film cancelled in Hong Kong") Hang Seng Index was down 0.3%. Hao Hong, [Head of Research at BOCOM International](https://www.financedigest.com/the-hidden-financial-woes-of-international-students-heading-for-the-uk.html "The Hidden Financial Woes of International Students Heading for the UK"), expects limited appetite from investors to hold big positions in Asia after heavy market selling, as the Lunar New Year holiday approaches. U.S. Treasuries were steady, with yields on two year notes at 1.0313%, [holding onto gains](https://www.financedigest.com/oil-struggles-to-hold-gains-amid-mixed-demand-view.html "Oil struggles to hold gains amid mixed demand view") made earlier this month. The [yield on benchmark 10-year Treasury](https://www.financedigest.com/wall-street-drops-treasury-yields-gyrate-on-fed-chairman-powells-remarks.html "Wall Street drops, Treasury yields gyrate on Fed Chairman Powell’s remarks") notes was 1.7743%, a little below the two-year high of 1.9% hit last week. \[US/\] The dollar index against a basket of major currencies was mostly unchanged, with the greenback near its month high [versus the eurohit the day](https://www.financedigest.com/its-culture-versus-commerce-on-liverpools-albert-dock-these-days.html "It’s culture versus commerce on Liverpool’s Albert Dock these days") before. \[FRX\] U.S. crude dipped 0.4% to $85.22 a barrel, and Brent crude fell 0.25% to $87.96 per barrel, as [investors booked profits](https://www.financedigest.com/aviva-boosts-investor-payouts-after-profit-beat.html "Aviva boosts investor payouts after profit beat") from recent highs. \[O/R\] Gold [prices were steady](https://www.financedigest.com/oil-prices-steady-after-u-s-stockpile-swell.html "Oil prices steady after U.S. stockpile swell") on Wednesday at $1,846 per ounce supported near the previous session’s 10-week high. \[GOL/\] (Reporting by Stella Qiu and Alun John; Editing by Lincoln Feast and Kim Coghill) --- This blog is powered by Superblog. 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