Australia’s ASX 200 index traded flat on Wednesday ahead of the easing of lockdown restrictions in Victoria and Melbourne. Other Asia Pacific indices declined ahead of the Fed’s interest rate decision. Japan’s Nikkei 225 index and Hang Seng index dropped by more than 0.30%.
ASX 200 Concerns
The ASX 200 index was hovering its highest level on a closing price basis on Wednesday. The gains in the index were boosted by a 1.9% increase in the energy sector. The gains in the sector were led by a 1.3% gain in utilities. Tech shares fell 1.2%.
The 25 km travel restriction was lifted in Melbourne as well as the mandatory mask rules outdoors. Gyms and indoor entertainment were reopened. The office capacity was increased by 50%. However, the mandatory mask rules were still in place for office spaces.
In Victoria, restaurants, and cafes were allowed to host 300 customers. Weddings were allowed a maximum of 50 guests while funerals were allowed only 100. The Victorian hospitality industry will be a large boost to the ASX 200 index.
The storms that lashed Victoria last week left around 250,000 homes and businesses powerless even now. The Insurance Australia Group (IAG) has received 4300 claims due to the storms. The company is expected to pay between $720 million and $743 million following the storms.
Fitch Ratings has increased its global inflation and economic growth. The company believes that consumer prices will slowdown in the upcoming years. The rating agency has estimated a 6.3% in the global economy this year.
The economic growth will be boosted by a stronger than expected economic recovery in the US. Global growth is also expected to drop to 4.3% next year as US CPI falls from 4.1% in 2021.
Economic investors now await Fed’s decision later in the day. This will help gauge the economic outlook for different indices. Investors will also get clues on what the FOMC is thinking about future interest rates and inflation.
ASX 200 Movers
Some of the best performers in the ASX 200 index were the a2 Milk Company Limited, Afterpay Limited, ARB Corporation Limited and Australia & New Zealand Banking Group. The a2 Milk Company gained 5.42% in its stock earnings. Afterpay, ARB and Australia & New Zealand Banking each gained more than 2%.
Austal Limited was the worst performer in the index. The company dropped more than 9% in its stock prices. Atlas Arteria fell by 2.19% as Altium Limited declined by 1.54%.