Most Asian mar­kets down on back of US rate hike con­cerns

The Myanmar Times - - International Business -

MOST Asian mar­kets swung lower yes­ter­day fol­low­ing healthy gains at the end of last week, as in­vestors bet that the US Fed­eral Re­serve will raise in­ter­est rates be­fore the end of the year.

Shares had soared at clos­ing last week 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 years-long growth slow­down.

An­a­lysts said com­ments from Fed boss Janet Yellen on Oc­to­ber 14 sug­gested the US cen­tral bank would raise bor­row­ing costs but at a steady pace.

Ms Yellen said run­ning a “high­pres­sure econ­omy” could help it over­come the dam­age caused by the global fi­nan­cial cri­sis.

“If noth­ing else, this is an­other lower-for-longer pre­scrip­tion. How­ever, th­ese com­ments do not pre­clude a 25-ba­sis-point rate hike 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 per­cent higher, with a pick-up in the dol­lar against the yen help­ing ex­porters, while Seoul was 0.2pc up.

But Shang­hai closed 0.7pc lower and Syd­ney shed 0.8pc, while Sin­ga­pore sank 0.2pc and Welling­ton tum­bled 0.9pc. Hong Kong was down 0.8pc. Bangkok’s mar­ket dipped 0.2pc, hav­ing soared on Oc­to­ber 14 as news of the death of Thai­land’s king fu­elled bar­gain-buy­ing af­ter heavy sell­ing in his fi­nal days. The dol­lar bought 104.14 yen in Tokyo, from 104.16 yen in New York but still well up from the 103.66 yen last week.

The pound re­mains bolted at three-decade lows as traders fret over Bri­tain’s plans to leave the Euro­pean Union. –

‘If noth­ing else, this is an­other lower-for­longer pre­scrip­tion.’

Thomas Si­mons Jef­feries LLC

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