Asian markets track Wall St declines after Fed acknowledges global risks to US economy

(Bloomberg) - Asian stocks fell, tracking declines in U.S. equities, after the Federal Reserve cited international risks to the American economy and oil slumped below US$45 per barrel.

The MSCI Asia Pacific Index slid 0.5 per cent to 141.74 as of 9:01 a.m. in Tokyo.

The Fed acknowledged global risks in its statement Wednesday, saying that it will take into account readings on "international developments" as it decides how long to keep key rates near zero. While boosting their assessment of the economy, policy makers said inflation will probably slow further. U.S. oil supplies climbed to their highest level in data going back more than 30 years, exacerbating concerns over a global supply glut.

"The market was hoping for a little bit more dovish statement," said Nader Naeimi, head of dynamic asset allocation at AMP Capital Investors in Sydney. "The first move is going to get the market unnerved, especially in a world where there is global divergence."

Japan's Topix index slipped 0.7 per cent, while South Korea's Kospi index retreated 0.5 per cent. Australia's S&P/ASX 200 Index declined 0.3 per cent.

New Zealand's NZX 50 Index climbed 0.3 per cent after the country's central bank shifted to a neutral stance on interest rates and hinted it is prepared to lower them as plunging oil prices damp inflation globally.

The Fed said it's confronting divergent economic forces as it weighs the timing of the first U.S. rate increase since 2006, according to a statement Wednesday. Surprisingly strong job gains argue for tightening sooner, while inflation held down by a plunge in oil prices and a cooling global economy provides grounds for delay.

Chinese stock-index futures slumped amid speculation increased regulatory scrutiny of margin loans will spur some leveraged investors to reduce holdings. Contracts on the FTSE China A50 Index traded in Singapore slid 1.8 per cent. Cash markets are yet to open in China and Hong Kong.

Chinese regulators plan to start a new round of checks on the margin lending businesses of brokerages as soon as this week, people familiar with the situation said. The China Securities Regulatory Commission didn't immediately reply to a fax and e-mail seeking comment.

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