BANGKOK ? Asian stocks fell Wednesday after the Federal Reserve refrained from offering new initiatives to help a slowly recovering U.S. economy.
Benchmark oil hovered below $100 per barrel while the dollar rose against the euro but slipped against the yen.
Japan's Nikkei 225 index fell 0.8 percent to 8,787.68. South Korea's Kospi lost 0.4 percent at 1,856.46 and Hong Kong's Hang Seng shed 0.2 percent to 18,413.79. Australia's S&P/ASX 200 rose less than 0.1 percent to 4,196.40.
Benchmarks in mainland China, Singapore and Indonesia fell while Taiwan, India and the Philippines rose.
U.S. stocks gave up gains Tuesday after the Fed released a policy statement that made clear it was not offering any new steps to help the economy.
The Fed said that the U.S. economy, while improving, is still weak. Unemployment remains high, and it remains vulnerable to the European debt crisis, which could push the continent into a recession and slow U.S. growth.
Analysts said markets were disappointed that the Fed refrained from a third round of large-scale purchases of Treasury securities, dubbed quantitative easing III or QE3.
"I think QE3 would be a welcome change to the status quo. I think the market was disappointed," said Francis Lun, managing director of Lyncean Holdings in Hong Kong.
The Dow Jones industrial average fell 0.6 percent to close at 11,954.94. The Standard & Poor's 500 index fell 0.9 percent to 1,225.73. The Nasdaq composite fell 1.3 percent to 2,579.27.
The Dow dropped more than 70 points in the last hour of trading and had risen as high as 126 points earlier Tuesday after two strong auctions of European debt. The Spanish government was able to sell short-term debt at much lower interest rates compared with a month ago, a signal that markets are becoming less fearful about the government's ability to repay its debt.
And in its first sale of short-term bills, the European Financial Stability Fund raised 1.9 billion euros ($2.6 billion).
Still, investor sentiment remained fragile amid threats by Standard & Poor's to downgrade the credit ratings of 15 countries that use the euro because of the region's debt crisis.
"We are likely to continue seeing some cautious trading as the threat of S&P coming out to issue some downgrades at some stage this week looms," said Stan Shamu of IG Markets in Melbourne, Australia.
"Some would argue that this is already priced in, but it will still likely rock the boat should it happen."
Export shares in Japan were under pressure as the yen strengthened against a shaky euro. Sharp Corp. dropped 3 percent while Toshiba Corp. lost 1.7 percent. Honda Motor Corp. slid 2.6 percent.
Chinese property shares dropped after the government signaled that it would maintain price curbs on real estate.
"The government has set a clear tone for reining in runaway housing prices next year," Wang Yulin of the Ministry of Housing and Urban-Rural Development was quoted as saying by Xinhua news agency.
Hong Kong-listed China Vanke Co. fell 1.4 percent and Evergrande Real Estate Group dived 3.3 percent.
Australia's Westpac Banking Corp. was down 0.2 percent after the bank warned that net interest margins, and revenues in its markets business, were being impacted by Europe's debt crisis.
Benchmark oil for January delivery was down 23 cents to $99.91 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose $2.37 to finish at $100.14 an ounce on the Nymex on Tuesday.
In currencies, the euro fell to $1.3034 from $1.3043 late Tuesday in New York. The dollar fell to 77.95 yen from 77.97 yen.
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