Asian stocks stum­ble as US rate hike talk grows

> In­vestors ex­pect Fed to raise bor­row­ing costs be­fore the end of the year

The Sun (Malaysia) - - SUNBIZ -

HONG KONG: Most Asian mar­kets swung lower yes­ter­day fol­low­ing healthy gains at the end of last week, as in­vestors bet that the Fed­eral Re­serve (Fed) will raise in­ter­est rates be­fore the end of the year.

Shares had soared on Friday af­ter data showed the first rise in Chi­nese fac­tory prices for more than four years, fu­elling hopes the world’s num­ber two econ­omy is reach­ing the end of a years­long growth slow­down.

An­a­lysts said com­ments from Fed boss Janet Yellen on Friday sug­gested the US cen­tral bank would raise bor­row­ing costs but at a steady pace.

Yellen said run­ning a “high-pres­sure econ­omy” could help it over­come the dam­age caused by the global fi­nan­cial cri­sis.

“If noth­ing else, this is another low­er­for-longer pre­scrip­tion. How­ever, these com­ments do not pre­clude a 25-ba­sis­point rate in­crease this year as another step in the nor­mal­i­sa­tion process,” Thomas Si­mons, se­nior econ­o­mist at Jefferies LLC in New York, wrote in a note to clients.

Most ex­perts pre­dict a rise by December at the lat­est and are closely watch­ing the re­lease this week of US in­dus­trial out­put and in­fla­tion data.

The prospect of higher bor­row­ing costs weighed on Asian mar­kets in the morn­ing but some staged a re­cov­ery as the day wore on.

Tokyo ended 0.3% higher, with a pickup in the dol­lar against the yen help­ing ex­porters, while Seoul was 0.2% up.

But Shanghai closed 0.7% lower and Sydney shed 0.8%, while Sin­ga­pore sank 0.2% and Wellington tum­bled 0.9%.

Hong Kong was down 0.8%, with casino shares taking a ham­mer­ing on news that 18 sales and mar­ket­ing staff of Aus­tralia’s Crown Re­sorts – in­clud­ing an ex­ec­u­tive in charge of lur­ing high­rollers to Aus­tralia – had been held in China. – AFP

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