Hawkish Fed minutes weighs on stock markets

Asian equity markets are lower today as it follows Wall Street south, digests the implications of a faster tightening Federal Reserve, and casts a nervous eye at China and its virus situation.

Overnight, the FOMC Minutes confirmed the hawkish comments of Lael Brainard the day before, causing more pain on Wall Street. The S&P 500 fell by 0.97%, the Nasdaq tumbled by 2.22%, while the Down Jones eased 0.42% lower. Index futures have continued falling in Asia, with Dow and S&P 500 futures down 0.25%, and Nasdaq futures down 0.15%.

In Asia, Tokyo’s Nikkei 225 has slumped by 1.75%, with South Korea’s Kospi retreating by 1.25%. Mainland China’s Shanghai Composite and CSI 300 have lost 0.50%, while rather surprisingly, Hong Kong’s Hang Seng is unchanged. Singapore is down 0.55%, Taipei is down 0.75%, Kuala Lumpur down 0.20%, and Jakarta 0.20% higher. Bangkok has lost 0.75% and Manila is 0.45% lower. Australian markets are also lower after the trade balance surprise, the ASX 200 and All Ordinaries losing 0.55%.

European equities had a torrid session overnight, caught in a vice grip of Russian sanction fallout, a faster tightening Federal Reserve and persistent nerves around the French presidential election. None of that has changed overnight and it is notable that Europe has not detailed its latest round of sanctions. The sombre mood in European equities will not lift today.