TOKYO – Asian stock markets mostly fell Tuesday as the prospect of higher U.S. interest rates dimmed the outlook for equities.
KEEPING SCORE: Japan’s benchmark Nikkei 225 fell 0.3 per cent to 18,733.31 and South Korea’s Kospi dropped 0.2 per cent to 1,989.72. Hong Kong’s Hang Seng shed 0.5 per cent to 24,105.60. Australia’s S&P/ASX 200 fell 0.2 per cent to 5,812.40. Southeast Asian markets were mixed.
FED WORRIES: Exceptionally strong U.S. jobs data on Friday, and the higher inflation that will eventually bring, raised the chances that the U.S. Federal Reserve will bring forward the timing of its first interest rate hike since the 2008 global financial crisis. Ultra-low interest rates and other monetary stimulus have been a boon for stock markets for several years as investors sought higher returns. But a return to more normal levels for interest rates in the world’s biggest economy likely spells an end to the bull market for stocks.
THE QUOTE: “The news out of the U.S. on Friday has certainly sent shock waves through all global markets, as rate rises from the Fed build momentum,” said IG strategist Evan Lucas in a market report. “Commentators are getting nervous about the direction of the US market in 2015” and rate rises are likely to “spell the end to the bull market,” he said.
WALL STREET: The Standard & Poor’s 500 index rose 8.17 points, or 0.4 per cent, to 2,079.43 on Monday, clawing back from a sell-off after the jobs data. The Dow Jones industrial average gained 138.94 points, or 0.8 per cent, to 17,995.72. The Nasdaq composite climbed 15.07 points, or 0.3 per cent, to 4,942.44.
ENERGY: Benchmark U.S. crude added 16 cents to $50.16 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose 39 cents to close at $50 a barrel on Monday. Brent crude, a benchmark for international oils, gained 16 cents to $58.69 a barrel in London.
CURRENCIES: The euro fell to $1.0796 from $1.0844 late Monday. The dollar rose to 121.86 yen from 121.44 yen.