Risk-off grips Asia ahead of Fed verdict

The sentiment on the Asian markets soured this Wednesday, as risk-off moods remained in full swings with markets now pricing-in a Trump win in the US presidential elections. Markets believe Trump’s “anti-trade policies would cause a sharp slowdown in the US economy and lead to a massive slump in the stock markets.

Moreover, the Asian equities took the negative cues from its Wall Street counterpart, while heavy selling seen in the riskier assets, including oil, also weighs down on the energy and resource stocks on the region’s indices.

While yen’s relative strength amid flight to safety dampens the sentiment around the exporters’ stocks and adds to the poor tone seen across the Asian markets. Further, the Australian markets also suffer from poor national fiscal outlook, as revealed by the Australian Parliamentary Budget Committee.

Meanwhile, Japan’s Nikkei 225 drops -1.50% to 17,180, the Australian S&P/ASX 200 drops –1.49% to 5,210. The Chinese equities edge lower, with the benchmark Shanghai Composite index down -0.25%, while CSI300 index also drops -0.23%. Hong Kong markets dive -1.23% to trade around 22,850 levels.

Looking ahead, all eyes remain on the Fed decision due later in the NA session, with markets looking forward to how strongly the Fed signals a Dec Fed rate hike prospects.