Asian stocks were mostly down today (August 6th) as speculation grew that a US rate hike was on the cards for September after the release of strong US economic data.
The Institute for Supply Management said yesterday the US service sector expanded 4.3 per cent in July to a record high, which strengthened the case for an earlier interest rate hike from the Fed, according to analysts.
"With the September FOMC meeting now firmly in the market's sights, there seems a newfound belief that the Fed's mindset has shifted to one of 'We are moving in September, give us a reason why we shouldn't'," IG market strategist Chris Westoon wrote in a note.
"Federal Reserve governor Jerome Powell took his turn to speak on policy overnight in what was a largely unscheduled speech and, despite sounding a touch more cautious, Dennis Lockhart kept the rate hike momentum going."
South Korea's Kospi lost 0.8 per cent to end the day at 2,013.29 while Australia's ASX 200 slid 1.1 per cent to close down at 5,610.10. China's Shanghai Composite Index fell 0.9 per cent to 3662.00 and Hong Kong's Hang Seng Index was down 0.6 per cent to 24375.28. Tokyo rose 0.24 per cent to finish at 20,664.64.
StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.
No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.