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Asian stocks sink after Wall St tumbles on Fed rate jitters

Asian stocks tumbled Monday, as investors reacted to comments last week from a Fed official, who caught markets off guard by saying that interest rates could rise soon

Asian stocks sink after Wall St tumbles on Fed rate jitters

HONG KONG (AP) -- Asian stocks tumbled Monday, as investors reacted to comments last week from a Fed official, who caught markets off guard by saying that interest rates could rise soon. Questions presidential candidate Hillary Clinton's health also cast a shadow after she was diagnosed with pneumonia during the weekend.

KEEPING SCORE: Japan's benchmark Nikkei 225 index lost 1.7 percent to 16,672.92 and South Korea's Kospi slid 2.2 percent to 1,993.55. Hong Kong's Hang Seng shed 2.9 percent to 23,401.21 and the Shanghai Composite Index fell 2.2 percent to 3,011.64. Australia's S&P/ASX 200 sank 2.2 percent to 5,219.60, while the Sensex in India dropped 1.4 percent to 28,411.39. Benchmarks in Taiwan, Thailand and New Zealand also fell.

FED FOCUS: The regional decline followed losses on Wall Street, which had its worst day in two months on Friday after investors seized on remarks by Fed Bank of Boston President Eric Rosengren. He said there's a case to be made for the U.S. central bank to raise its key interest rate sooner rather than later, surprising Fed observers, most of who believed a hike was not on the cards until December. The Fed's next meeting is set for later this month. Ultra-low interest rates have been a key driver of an extended stock market rally.

THE QUOTE: "The issue here for a lot of people is the fact they haven't seen interest rates go up (in a long time) and they just don't know what's going to happen," said Andrew Sullivan, a sales trader at Haitong Securities. With so much uncertainty over when the Fed will actually take action to raise rates, "I think there are a lot more investors that are going to go to cash and just wait and see what happens," he added.

US VOTE: Clinton's abrupt departure from a 9/11 anniversary ceremony on Sunday and her medical diagnosis, less than two months before election day, added an extra element of uncertainty to already fragile global sentiment. In a statement, Clinton's doctor said the former secretary of state had become overheated and dehydrated at the event in lower Manhattan.

WALL STREET: The Dow Jones Industrial average lost 2.1 percent on Friday to close at 18,085.45. The Standard & Poor's 500 index slid 2.5 percent to 2,127.81. The Nasdaq composite index lost 2.5 percent to 5,125.91.

ENERGY: Oil futures extended losses. U.S. benchmark crude fell 95 cents to $44.93 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell $1.74, or 3.7 percent, to close at $45.88 a barrel on Friday. Brent crude, used to price international oils, slid 92 cents to $47.09 a barrel.

CURRENCIES: The dollar slipped to 102.54 yen from 102.69 in late trading Friday. The euro climbed to $1.1245 from $1.1232.

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Updated : 2021-08-01 15:22 GMT+08:00