Asian shares drop amid Fed news
On Thursday, stocks in Asia dropped following concerns over American interest rate hikes, supposed to take place earlier than expected.
In Hong Kong, the Hang Seng Index dipped 0.7%. Australian S&P/ASX 200 dived 0.6%, while Korean Kospi sank 0.5%. Stocks closed mostly flat in China and Japan.
The Fed’s minutes as for its April meeting demonstrated the bank’s readiness to raise interest rates in the nearer future or to be exact in June. Undoubtedly, higher rates could help market participants looking for greater yield to draw their money out of risky assets. For instance, these might be emerging-Asia shares. So traders are leaving them in favor or American assets.
The prospect of higher American rates drive the greenback higher, applying pressure on energy shares as well as commodities prices. Australian BHP Billiton Ltd. Lost 3.7%, while Rio Tinto Ltd. Sank 3.3%.
In Japan, shares initially went up on relief over a dropping yen. As for shares of financial companies, they grew on hopes that higher American interest rates could drive their net interest margins.