Informative on US Fed

Informative :
Asian shares are trading lower as investors are cautious after the U.S. Federal Reserve raised the discount rate on Thursday.Punters also expecting the cascading effect on European markets and sentiments and also will affect the US markets today,especially Dow Jones Industrial Average.
The Fed raised the rate it charges banks for emergency loans by a quarter percentage point to 0.75%, a move that was signaled for some time.Hong Kong's Hang Seng was trading 2% down,Japan's Nikkei 225 was down 2%, South Korea's Kospi was down 2% and New Zealand's NZX-50 was down 0.2%. Dow Jones Industrial Average futures were down 63 points in screen trade.

Stocks in Tokyo fell in Friday morning trading as investors turned cautious after the US Federal Reserve raised its discount interest rate.

Overnight, the Federal Reserve raised the discount interest rate at which it lends directly to commercial banks by 0.25 percentage points to 0.75 per cent. Investors, however, were concerned that the move could help lead to tighter financial situations for businesses.The Fed said the hike in the discount rate, or the primary credit rate, to 0.75 percent from 0.5 percent reflected the easing of the financial crisis that resulted from a home-mortgage meltdown.

The euro and other risk sensitive currencies were trading lower on the Fed move. The single currency fell as low as $1.3465 against the U.S. dollar, its lowest level since May 18, 2009.Shares in Tokyo were moving in and out of positive territory, with a weaker yen supporting exporters. Investors are still digesting the impact of the Fed's discount rate hike, said Shinichiro Matsushita, market analyst at Daiwa Securities. "The weaker yen is positive for Japanese exporters and the Nikkei itself, but some investors are worried that the Fed's discount rate hike may lead to tighter financial conditions for businesses," he said.Canon rose 1.3%, Sony was up 1.3% and Sharp advanced 1.1%. Nissan Motor was up 0.9% but Toyota continued to struggle on persisting concerns about the fallout from its string of recent recalls. The stock was up 0.1%.
The Australian market was trading slightly up, but bank stocks were weighing.National Australia Bank fell 2.4% after its first quarter profit of A$1.1 billion came in below consensus estimates. Other banks were down as much as 0.8%. Among resources plays, Rio Tinto was down 0.3%, but BHP Billiton tacked on 0.8%.
Technology companies were weighing on the Korean market as early trade was fairly skittish. Samsung Electronics fell 0.2% and Hynix lost 0.9%.Automakers were up, with Hyundai Motor 1.3% higher and Kia Motors up 0.5%; brokerages were down with Daewoo Securities off 0.5%.
Shares in New Zealand were under pressure, with stocks leveraged to the economic cycle taking a hit. Chemicals maker Nuplex fell 1.8%, rural services company PGG Wrightson was down 1.7% at NZ$0.62, but jewelry retailer Michael Hill rose 2.9% after a strong first half result on Thursday. Sky Television, which posted a 19.1% rise in first half net profit, was flat.
Risk-sensitive currencies like the euro and the Australian dollar were down on the back of the Fed's move. The euro, already under pressure on lingering concerns about Greece's fiscal woes, was fetching $1.3485 against the dollar, down from $1.3527 late in New York Thursday. The single currency was buying Y124.00 against the yen, from Y124.25 and the dollar was at Y91.86 from 91.80.
Some traders, however, expect further gains in the U.S. dollar to be limited over the short term. "The Fed moved a bit quicker on the discount rate hike than we anticipated it would, but the fact remains that without clearer improvement in the jobs market, it won't be able to tighten policy more rapidly," said Shinkin Central Bank manager Yasuo Nakayama. Therefore, the market is unlikely to see sharp dollar gains over coming weeks, he said.
The Australian dollar was more or less driven by the Fed move rather than Friday's Reserve Bank of Australia Governor Glenn Stevens' testimony before parliament.
Sean Callow, senior currency strategist with Westpac, said the governor's opening statement "was pretty balanced," adding that traders will "look at Stevens, but in terms of Aussie/U.S., the U.S. part is now more appealing." The Australian dollar was at A$0.8930, down from A$0.9020 just prior to the Fed announcement.
Spot gold was at $1,106.35 a troy ounce, down $2.05 from the New York close after the Fed's move. The metal had fallen in the previous session on news the International Monetary Fund will soon be selling its remaining 191.3 tons of gold in the open market.