Asian shares were subdued on Thursday ahead of anxiously-awaited China-U.S. trade talks, while the US dollar consolidated recent bumper gains after the Federal Reserve reaffirmed the outlook for more rate hikes this year. The Fed policy meeting ended with no change as expected while the central bank expressed confidence a recent rise in inflation to near target would be sustained, leaving it on track to raise borrowing costs in June.
Reports that the Trump administration is considering executive action to restrict some Chinese companies' ability to sell telecoms equipment in the United States could unsettle investors. Talks between US Treasury Secretary Steven Mnuchin and Chinese Vice Premier Liu He are due to kick off later on Thursday, but a breakthrough deal is viewed as highly unlikely.
MSCI's broadest index of Asia-Pacific shares outside Japan was all but flat, while South Korean stocks eased 0.31 per cent. Japan's Nikkei was closed for a holiday, while E-Mini futures for the S&P 500 barely budged. Wall Street had wobbled on Wednesday as potential U.S. restrictions on Chinese telecom companies reinforced investor concerns about worsening trade relations.
The Dow ended down 0.72 per cent, while the S&P 500 also lost 0.72 per cent and the Nasdaq 0.42 per cent. (With Agency Inputs)