SINGAPORE : Asian stocks retreated from three-month highs and the dollar held on to gains following strong U.S. data that again suggested the Federal Reserve might stick longer with aggressive interest rate increases.
Stocks in Korea and Taiwan traded lower, while China's broader index rose 0.6 per cent and Japan and Hong Kong stocks were steady. "Monetary policy works with a lag and key spot indicators such as falling housing prices, rental rates, commodities, and freight pricing as well as rising layoffs and inventories are already signalling a weakening U.S. economy," said Chi.
On Monday, the Dow Jones Industrial Average fell 1.4 per cent, the S&P 500 lost 1.79 per cent and the Nasdaq Composite dropped 1.93 per cent. Brent crude futures ticked up 0.9 per cent to $83.4 a barrel. Futures fell more than 3 per cent in the previous session after the U.S. economic data.