Asia: Stocks succumb to rate fears
HONG KONG: Asian stocks fell on broadening concern on Wednesday that interest rates would rise in the United States in the coming months.
"The view that borrowing costs in the U.S. will keep on rising is weighing on stocks," said Minoru Takada, of Mitsubishi UFJ Asset Management.
The Morgan Stanley Capital International Asia-Pacific index fell 0.38 point to 123.61. Technology shares led losers among the index's 10 industry groups after Citigroup cut its recommendation on chip-related companies.
In Japan, the Nikkei 225 stock average slid 113.16 points, to 15,781.78, while the Topix lost 3.10 points, to 1,609.46. Markets dropped in South Korea, Singapore, Taiwan, Indonesia, China, Malaysia, Pakistan and the Philippines.
The Taiex in Taiwan fell 100.81 points to 6,530.70, the region's biggest slide, on concerns that Taiwan-United States relations could deteriorate.
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However, the Sensitive index in India climbed to a record, and markets also advanced in Australia, Thailand, Hong Kong and New Zealand.
Toyotafell ¥110, to ¥6,280. The automaker predicted that U.S. sales would account for about one in four of its cars this year, while in South Korea, mobile phone maker LG Electronicslost 3,000 won, to 79,600.
The release of the Fed's minutes on Tuesday showed that policy makers felt inflation had been "somewhat higher" than desired. The Fed has raised rates 14 times since June 2004.
"The chances of interest rates in the U.S. continuing to rise isn't positive news for stocks," said Park Hyun Jun, of KB Asset Management in Seoul.
Hon Hai Precision Industry,Taiwan's largest electronics exporter, lost 3.5 Taiwan dollars to 202.50 dollars.
Li & Fung, a Hong Kong supplier to U.S. retailers like Wal-Mart Stores,fell 25 cents to 15.60 Hong Kong dollars.
But steel makers, like Sumitomo Metal Industriesof Japan, added ¥10, to ¥482 while Poscoof South Korea gained 3,000 won, to 224,000 won.
"After the price increases, earnings prospects for steel makers this year won't be as discouraging as we thought," said Zhang Qi, at Haitong Securities in Shanghai.
