Asian Stocks Set to Fall as Traders Eye High Rates: Markets Wrap

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Asian equities look poised for a weak open as investors contend with the prospect of global interest rates staying at their highest levels in decades.

Futures for Japanese shares slipped 0.2%, while those for Australia dropped 0.5%. Contracts for Hong Kong and mainland Chinese stocks both fell at least 0.6%. The dollar opened mixed. A number of Australian states, including New South Wales, are shut Monday for holidays.

“Financial markets were bracing for a shutdown, so there’s an element of relief, but it’s only a temporary lifting of one of the clouds hanging over the markets now,” said Yung-Yu Ma, chief investment officer at BMO Wealth Management. “Interest rates and Fed hawkishness remain the name of the game and the main driver of the markets over the next few weeks.”A weak opening on the first trading day of October would extend a torrid period for global financial markets.

“Unless we get a clearly changed message from the key central banks – urgently — these past few weeks’ big market moves are unlikely to be over,” said Erik Nielsen, chief economics advisor at UniCredit Group. “The combination of high yields and zero growth typically raises concerns about financial stability, and while the key financial institutions are stronger today than in the past, it would be foolish to dismiss the rising risk.

 

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