On Thursday (19 March, 9:12 AM, GMT+7, Bangkok time), major indices in the Asia Pacific decreased across the board, in line with losses seen on Wall Street, after U.S. Federal Reserve Chair Jerome Powell indicated that inflation remained higher than expected, lessening prospects for rate cuts.
The Fed chose to keep its benchmark interest rate within the 3.5% to 3.75% range, with Powell emphasizing that inflation was not moderating as quickly as policymakers had anticipated. Data released showed the producer price index, measuring wholesale inflation, climbed by 0.7% in February. This figure surpassed the 0.3% increase forecast by economists surveyed by Dow Jones.
Despite these inflationary pressures, the central bank’s projections, illustrated by its “dot plot,” still anticipate a rate reduction in 2026, with expectations for another cut in 2027, while specific timelines remain uncertain.
Additionally, Fed officials now forecast headline inflation reaching 2.7% in 2026, up from the previous estimate of 2.4%. The core inflation metric, which omits food and energy prices, is also forecast to rise to 2.7% for the same period.
The slide in equities was further exacerbated by a surge in oil prices after several attacks targeted major energy facilities in the Middle East. The incidents raised concerns among traders that intensified conflict could translate into greater inflation risks from higher energy costs.
Notably, market participants will also be monitoring developments in Japan as the country’s central bank is anticipated to hold interest rates steady at 0.75%.
Japan’s NIKKEI dropped by 2.60% to 53,803.56. South Korea’s KOSPI slumped by 2.49% to 5,777.71, and Australia’s ASX 200 lost 1.57% to 8,505.10.
As for stocks in China, Shanghai’s SSEC fell by 0.63% to 4,037.19. Shenzhen’s SZI declined by 0.93% to 14,055.40, and Hong Kong’s HSI contracted by 1.38% to 25,666.88.
The U.S. stock markets edged down on Wednesday as the Dow Jones Industrial Average (DJIA) decreased by 1.63% to 46,225.15. NASDAQ plummeted by 1.46% to 22,152.42, and S&P 500 shrank by 1.36% to 6,624.70. VIX jumped by 12.16% to 25.09.
As for commodities, oil prices settled higher on Wednesday as markets reacted to Iranian strikes on key energy sites in the Middle East. The attacks came after Iran’s South Pars gas field was hit, marking a substantial escalation in tensions. Brent crude prices advanced $3.96 or 3.82% to $107.38 a barrel, while U.S. West Texas Intermediate crude rose 11 cents or 0.11% to end at $96.32.
The prices extended gains this morning, with Brent rising $5.02, or 4.67%, to $112.40 per barrel, and the WTI surging $2.31, or 2.40%, to $98.63.
Meanwhile, gold futures declined by 0.98% to $4,848.30per Troy ounce.
