Asian shares fall to lowest in 15 months after US Fed nails on March rate rise
Stock markets in Asia have tumbled to their lowest in nearly 15 months after America’s central bank chief confirmed widely expected plans to increase interest rates this year, beginning in March.
With investors also concerned about political tensions between Russia and Ukraine, supply chain problems and rising oil prices, the prospect of sustained increases in the cost of borrowing by the world’s most powerful economy sent a spasm of anxiety through financial markets on Thursday.
The Nikkei in Japan led the way as it plunged more than 3% while the Kospi in Seoul found itself in similarly negative territory. The market in Hong Kong was off 2.5% and Sydney shed nearly 2%.
MSCI’s broad gauge of regional markets outside Japan fell more than 2% to its lowest level since November 2020.
The drop echoed a sharp reversal in US shares on Wednesday. The S&P 500 closed 0.14% lower and the Nasdaq Composite finished barely higher, erasing a rise of more than 3.4%. The Dow Jones average slipped 0.38%.
<p lang=«en» dir=«ltr» xml:lang=«en»>Markets messier than that friend with a kebab at 3am. US futures -1% 5-30 curve flattens further Korea poised for bear market Australia poised for correction Asia FX down We're just a few hours removed from Fed briefing so let's give this time to settle, hopefully. pic.twitter.com/5vxqKFBaUpThe FTSE100 is set to fall nearly 2% when it opens on Thursday morning, according to futures trade, with the Wall Street markets also heading for a hefty loss.
Mike Kelly, head of global multi-asset at PineBridge Investments in the US, said it was a sign to “get the heck out” of US stocks. “It’s all about selling longer duration assets,” he said, “so we are underexposed to US equities.”
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