U.S. equities showed losses overnight as fresh declines in oil prices pushed Asia markets lower Thursday morning. Concerns the Federal Reserve may hike interest rates sooner than expected kept prices down.
According to a representative at Mizuho Bank, “Expectations of an earlier Fed tightening are now seeping through markets, albeit at a slow pace with less investors willing to place bets on what the Fed say they might do, especially after what they have actually done by pushing back rate hikes.”
Japan’s Nikkei 225 reversed early losses to trade up 0.22 percent, while South Korea’s Kospi index fell 0.16 percent and Hong Kong’s Hang Seng index was down 0.59 percent.
Chinese markets came in mixed, with the Shanghai composite off by 0.52 percent, while the Shenzhen composite was flat.
AUD Down
In Australia, the benchmark ASX 200 was off by 1.05 percent. Australian banking stocks were sharply lower with ANZ down 5.41 percent, Commonwealth Bank of Australia off by 2.27 percent, Westpac down 4.11 percent and NAB falling 2.92 percent.
The Australian dollar retreated against the U.S. dollar, back to the $0.75 level, after commodity currencies were sold off overnight. The Aussie/U.S. dollar pair traded down 0.33 percent at 0.7503 as of 9:53 a.m. HK/SIN time.
The Japanese yen remained at the 112 level against the greenback, with the dollar/yen pair trading up 0.38 percent at 112.78 by mid-morning local time.
The dollar firmed as commodities sold off, sending the dollar index up 0.5 percent to just above 96. Platinum plunged more than 3.5 percent in its worse sell-off since January, while gold lost about 2 percent to $1,223 per troy ounce.
Oil prices continued its retreat during Asian hours, with U.S. crude futures slipping 0.43 percent to $39.62 a barrel, after falling 4 percent overnight. Global benchmark Brent was down 0.1 percent at $40.44, after slipping 3.2 percent in U.S. hours.
