Asian stock markets down
Concerns that the Federal Reserve might start scaling back its
stimulus program due to a seeming improvement in the US economy sent
Asian stock markets lower on Thursday. Sharp rises in global stock
markets this year have been partly fuelled by Central Bank actions to
support economies in the US, Europe and Japan. Positive signs of growth
in the US, including data released on Tuesday showing improved consumer
confidence and housing prices, have helped boost Wall Street stocks to
record highs.
 However, an improving US economy increases the chance that the Fed
might ease back on its massive bond-buying program, known as
quantitative easing.
The purchase of $85 billion a month in Treasury bonds has helped keep
interest rates super-low and been a boon to stock markets, where
investors have fled in search of higher returns.
Japan's Nikkei 225 index fell 2.8 percent to 13,932.92. Hong Kong's
Hang Seng shed 0.2 percent to 22,518.85. Australia's S and P/ASX 200
dropped 1.5 percent to 4,900.90. Benchmarks in Singapore, Taiwan,
Indonesia, and the Philippines also fell. South Korea went against the
flow, rising 0.2 percent to 2,005.99. The lack of major data releases
for the day deprived investors of reasons to wade into stocks, analysts
said.
"A lack of first tier data releases will limit activity although the
tone will likely remain relatively downbeat," said Mitul Kotecha of
Credit Agricole CIB in a market commentary.
The latest speculation surrounding the Fed came after the release of
positive consumer confidence and housing news on Tuesday.
That led investors to fret over the prospect of the Fed reducing its
bond-buying. Investors were also booking profits. Benchmark oil for July
delivery was up five cents to $93.15 per barrel in electronic trading on
the New York Mercantile Exchange.
The contract for the benchmark grade fell $1.88 to close at $93.13 a
barrel on the Nymex on Wednesday. In currencies, the euro rose to
$1.2958 from $1.2934 late Thursday in New York. The dollar rose to
101.23 yen from 101.15 yen. |
