Asia stocks down on prospect of Fed stimulus cutDecember 10, 2013 @ 8:38 pm
MANILA, Philippines (AP) - Asian stocks were mostly down Wednesday as investors factored in the prospect of the Federal Reserve reducing its lavish monetary stimulus this month.
Japan's Nikkei 225 fell 1.1 percent at 15,436.50 and Hong Kong's Hang Seng dropped 1.2 percent to 23,448.71. China's Shanghai Composite shed 1.1 percent to 2,211.88. Markets were also down in Singapore and Australia and slightly up in the Philippines, Malaysia and Thailand.
After the U.S. reported stronger-than-expected employment figures last week, markets became convinced the Fed would start to taper off its stimulus. The central bank's $85 billion of monthly bond purchases have kept U.S. interest rates low to encourage economic recovery but also sent a flood of money into stock markets worldwide in search of higher returns.
"Markets have started to factor in the prospect of Fed tapering at the December meeting," said Daniel Martin of Capital Economics in Thailand. The Federal Reserve's policy-making Federal Open Market Committee is scheduled to meet Dec. 17-18 in Washington.
On Wall Street, stocks fell modestly Tuesday as investors took a breather from a string of record highs.
Fund managers are expected to close out positions and sell off poorer performing stocks in the last weeks of the year to "window dress" or make portfolios look as good as they can when they mail their year-end statements to investors.
The Dow Jones industrial average fell 52.40 points, or 0.3 percent, to 15,973.13. The Standard & Poor's 500 index lost 5.75 points, or 0.3 percent, to 1,802.62. The index hit an all-time high Monday. The Nasdaq composite lost 8.26 points, or 0.2 percent, to 4,060.49.
Benchmark U.S. crude for January delivery was down 6 cents to $98.45 in electronic trading on the New York Mercantile Exchange. The contract gained $1.17 to close at $98.51 on Tuesday.
In currencies, the euro dropped slightly to $1.3751 from $1.3759 late Tuesday in New York. The dollar fell to 102.65 yen from 102.85 yen.
(Copyright 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)
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